Gujarat BoardEnglish MediumSTD 12 CommerceOCMMARKETING MANAGEMENT5 Marks
Question
Explain – Price determination on the basis of objectives.
✓
Answer
Price determination on the basis of objectives:
Over and above the factors discussed above, there are some other objectives too which the producer might consider while determining the price.Some of them are:
$(A)$ Maximum profit:
Under this objective, the producer determines the price of the product with an aim of earning maximum profit. He does so either because there is no competition in the market or he has spent heavily in the research and development of the product.
$(B)$ To acquire dominant position in the market:
In most cases the producers keep a very low price of his product so that they can attract maximum customers and dominate the market.
$(C)$ To sustain competition:
When competitors are more and when competition is high, the business firms tend to fix prices lower than or at par with competitors.
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