- seeks to maximize current profit, taking into account revenue and costs.Current profit maximization may not be the best objective if it results in lower long-termprofits.
- set low price to gain large market share (market penetration)- companies with this objective believe that gaining the largest market share willeventually lead to low costs and high long-rung profits.
*Brand Equity Growth
- seeks to increase a brand’s value (high brand-name awareness; maintain afavorable brand image, perceive that the brand is of high quality; increase loyalty to thebrand)- a strong brand equity helps companies earn a price premium and increasesales volume.Brand equity – is the summation of all associations that consumer have with a brand –including communication, product benefits, emotional benefits and experiential benefits.
- use price to signal high quality in an attempt to position the product as thequality leader.
- create barriers to entry, temporarily create excitement for a new product, tostabilize market, etc.
2.Marketing Mix Strategy
Price must be coordinated with product design, distribution, and promotion decisions toform a consistent and effective marketing program.
-Sets the floor for the price a company can charge for its product.
PricingMarket TargetingMarket PositioningObjectives:*Survival*Current ProfitMaximization*Market-ShareLeadership*Brand Equity Growth PlaceProductPromotion