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1. 1
Ahmad Faraz
0304-7765351
afaraz.ns@gmail.com
Rasool Pur Colony, Noor Shah, Sahiwal

2. A goal that guides a business in setting the cost of
a product or service to potential consumers is called pricing
objective. A pricing objective underlies the
pricing process for a product, and it should reflect a
company's marketing, financial, strategic and product goals,
as well as consumer price expectations and the levels of
available stock and production resources. Some examples of
pricing objectives include maximizing short run profits,
increasing sales volume, matching competitors' prices, or
meeting target rates of return. Each pricing objective
requires a different price-setting strategy in order to
successfully achieve business goals.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

3. 3
Profit-Oriented Pricing Objectives
Sales-Oriented Pricing Objectives
Status Quo Pricing Objectives
Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

4. 4
Profit-Oriented Pricing Objectives
Profit
Maximization
Satisfactory
Profits
Target
Return on
Investment
Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

5. 5
Setting prices so that total revenue is as large as
possible relative to total costs.
Profit maximization does not mean profiteering. There is nothing
wrong in this policy if practiced over the long run. As a matter of
fact, many of the enterprises strive to maximize their profits.
Maximization of profits should be on the total output and not on a
single item. In such case, consumers do not get dissatisfied since
a particular group is not called for paying a high price. While
adopting this pricing objective, the marketers should attempt to
project their image in the market through sales promotion
techniques. The marketers should watch the reactions of the
consumers. Profit maximization through price hikes should be
sparingly used.

6.  Satisfactory profits represent a reasonable
level of profits that is consistent with the level
of risk an organization faces.
 To satisfy customers is the prime objective of
the entire range of marketing efforts. And,
pricing is no exception. Company sets, adjusts,
and readjusts its pricing to satisfy its target
customers. In short, a company should design
pricing in such a way that results into
maximum consumer satisfaction.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

7. 7
Net profit after taxes divided by total assets.
ROI = Net Profit after taxes
Total assets
Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

8.  Marketers should understand the position of their
company and the returns expected when making
adjustments in prices.
 Return on investment is one way of considering
profits in relation to the capital invested.
 The purpose of the return on investment metric is to
measure per period rates
of return on dollars invested in an economic entity.
 Return on investment is often compared to expected
(or required) rates of return on investment.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

9. 9
Market
Share
Sales
Maximization
Sales-Oriented Pricing Objectives
Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

10. 10
A company’s product sales as a percentage of total sales for
that industry.
A company may either have the objective of maintaining the present
market share or increase its share depending upon its standing.
Particularly, big business houses adopt such pricing that it enables
them to retain their market share. If they raise their market share,
they may draw the attention of the government and if they shed their
share, they may lose revenues. Contrary to this, small business
houses are found interested in raising their share in the
market so as to reap the benefit of large-scale production.
In few cases, firms may sell the products even at a lower cost
to capture the market. However, such practice may lead to
financial crisis. As a matter of fact, this is an objective to be
adopted by new firms carefully.
Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

11.  Short-term objective to maximize sales.
 Ignores profits, competition, and the marketing
environment.
 May be used to sell off excess inventory.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

12.  Company’s objective is to increase sales volume. It
sets its price in such a way that more and more sales
can be achieved. It is assumed that sales growth has
direct positive impact on the profits. So, pricing
decisions are taken in way that sales volume can
be raised. Setting price, altering in price, and
modifying pricing policies are targeted to
improve sales.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

13. 13
Maintain
existing
prices
Meet
competition’s
prices
Status Quo Pricing Objectives
Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

14.  Frequent changes in the prices of product will harm
the long-term interests of the companies. Hence,
they aim at stabilization of prices. They do not make
use of a short supply position to earn the maximum.
During the periods of good business, they try to
keep prices from raising and during the
periods of depression, they keep prices
from falling too low. Thus, they take a long
term view in achieving price stability.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

15.  In 1998, the ECB Governing Council formulated the
quantitative definition of price stability:
"Price stability is a year-on-year increase in the Harmonized
Index of Consumer Prices (HICP) for the euro area of below
2%. Price stability must be maintained over a medium-term
perspective."
 In addition, in May 2003 the Governing Council
also clarified that, in the chase of price stability,
it aims to maintain inflation rates "below, but close
to, 2% over the medium term".
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

16.  Price stability contributes to achieving high levels of economic
activity and employment by
 improving the transparency of the price mechanism. Under price
stability people can recognize changes in relative prices (i.e. prices
between different goods).
 avoiding unproductive activities to hedge against the
negative impact of inflation or deflation.
 preventing an arbitrary redistribution of wealth
and income as a result of unexpected inflation or
deflation.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

17.  What is 'Competitive Pricing'
 Competitive pricing is setting the price of a product or service based
on what the competition is charging. This pricing method is used
more often by businesses selling similar products, since services can
vary from business to business, while the attributes of a product
remain similar. This type of pricing strategy is generally
used once a price for a product or service has reached
a level of equilibrium. This level of equilibrium
occurs when a product has been on the market for a
long time and there are many substitutes for the product.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal

18.  Businesses have three options when setting the price for a good or
service:
 set it below the competition,
 at the competition
 or above the competition.
Above the competition pricing requires the business to create an
environment that warrants the premium, such as
generous payment terms or extra features.
A business may set the price below the market and
potentially take a loss if the business believes that the
customer will purchase additional products from their
business once the customer is exposed to the other offerings.
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Ahmad Faraz Rasool pur colony noor Shah,
Sahiwal