PRICE

▪ Pricing Objectives
▪ Pricing Approaches
▪ Pricing Under Various Market
Conditions
 What is price?
Price is the money, good, or service exchanged for the ownership or use of a good
or service.

Example:
When one hundred paid for a sack of corn, that amount is the price of the corn.

When a boy is asked to carry a sack of corn from

the parking area to the pesos is store
and is paid a kilo of corn, the price of the
service is one kilo of corn.
Pricing Objectives
•Profit-oriented objectives
- to achieve the target return on investment or on net sales or
- to maximize profit.

• Sales-oriented objectives
-increasing sales volume; or
-maintaining or increasing market share.

•Status quo-oriented objectives.

- to stabilize prices;
- to meet competition
- to avoid competition.
Pricing Approaches
•Cost based approach
-This pricing refers to the setting of prices on
the basis of cost.
• Buyer based approach
-This pricing deals with consumer perceptions or
behavior as bases for determining the selling
price of a product or service.

• Competition based approach.

-This pricing refers to the setting of prices
based on what prices are being charged by
competitors.
 Pricing Under Various Market Conditions
• Pure monopoly
-This is a competitive situation where there is only one seller in a
market.

• Oligopoly
- Only a few firms compete in the sale of a commodity.
•Pure competition
- refers to that market where there are a great number
of sellers and buyers.
•Oligopsony
-In oligopsony, only a few buyers compete in the
purchase of a commodity.

•Monopsony
-a competitive situation characterized by the presence of
only one buyer.