Pricing is of vital importance to every firm as it has a great effect on the revenue as well as on the cost. It affects profit, demand and quality of the product.

Objectives Of Pricing

Some of the objectives for pricing are:

(a)    Pricing is a weapon for increasing sales volume.:

Pricing is a weapon for increasing sales volume Its effectiveness is increased when it is used in combination with advertising and sales promotion.

(b)    Increase in Market Share:

When a firm has high sales volume and low market share ,it may be sidelined in the course of tie. Price is an important tool in maintaining or increasing the market share.

(c)    To Earn Profit:

One of the objective of pricing policy is profit which is determined by rate of return on investment.

(d)    To Stabilize Prices:

 In order to avoid conflicts in prices when the demand declines. Many firms aim at maintaining stable prices.

(e)    Competition:

 Many firms which have little influence on competition adopt pricing strategies in order to survive in the competition.

For more help in Pricing click the button below to submit your homework assignment