Do you know what is pricing, what exactly is the pricing? What are the major objectives of pricing? Today we will discuss the definition of pricing with their main objectives in detail.
Deciding the price of the product or service is very important for any business or firm. determining the price with the organizational objectives is very important for any business. Deciding the price without objectives will be bad for the firm in the future.
Concept and meaning of pricing:
Price is an important element of the marketing mix. Price refers to the monetary unit as well as the amount paid for the value of goods and services. It can be understood as the unit of money paid for a certain value of a product or service.
In the same way, Pricing is the process of setting and determining the price of certain goods or services. Pricing determines the price of the product or services according to the quality and importance of the product.
What are the objectives of pricing?
There are different motives and objectives of pricing but we will discuss the major objectives of pricing as mentioned below:
1. Profit oriented objective
It is the main objective of pricing in marketing. Price is determined to achieve the target return of profit. Profit is added like 30%, 33%, 66%, and so on on the price.
In the same way, price is determined in order to maximize profit only but not consider customer satisfaction.
2. Sales oriented objectives
In the same way, sales are also the main objective of pricing. A business or firm determines the price of the product in order to increase the sales volume. Sometimes firms can sell products and services even in the loss for the short term to earn profit in long term.
A firm determines the price in order to increase its market share. This firm determines the less price than competitive products and services.
3. Status Quo- oriented objectives
In the same way, the status quo is also the objective of pricing. Big and reputed businesses neither decrease nor increase the price according to the fluctuation of demand and supply in order to maintain the goodwill of the firm.
Firms determine the price to meet competition. In these objectives, a suitable price is determined without caring for profit in order to sustain with competitors as well as increase their market share.
In this way, pricing is the process of determining and setting the price of the particular goods or services in order to achieve the organizational goal as well as capture the market share.
pricing plays a very important role in marketing in any business or firm. In the same way, determining the prices according to the objectives of the organization as well as the nature of the product is very important.
Pricing plays a very important role in the business, customers as well as the economy.
As we discuss above there are three major objectives of pricing i.e. profit-oriented, sales, and status quo-oriented. These objectives have their own importance in order to grow the business. Deciding on the best objectives according to the organizational goal of an organization will be te very beneficial for any business or firm.