Pricing objectives or goals give direction to the whole pricing process. Determining what your objectives are is the first step in pricing. When deciding on pricing objectives you must consider: 1) the overall financial, marketing, and strategic objectives of the company; 2) the objectives of your product or brand; 3) consumer price elasticity and price points; and 4) the resources you have available.
Some of the more common pricing objectives are:
maximize long-run profitmaximize short-run profitincrease sales volume (quantity)increase monetary salesincrease market shareobtain a target rate of return on investment (ROI)obtain a target rate of return on salesstabilize market or stabilize market price: an objective to stabilize price means that the marketing manager attempts to keep prices stable in the marketplace and to compete on non-price considerations. Stabilization of margin is basically a cost-plus approach in which the manager attempts to maintain the same margin regardless of changes in cost.company growthmaintain price leadershipdesensitize customers to pricediscourage new entrants into the industrymatch competitors pricesencourage the exit of marginal firms from the industrysurvivalavoid government investigation or interventionobtain or maintain the loyalty and enthusiasm of distributors and other sales personnelenhance the image of the firm, brand, or productbe perceived as “fair” by customers and potential customerscreate interest and excitement about a productdiscourage competitors from cutting pricesuse price to make the product “visible"help prepare for the sale of the business (harvesting)social, ethical, or ideological objectives
