ENTREPRENEURIAL MARKETING
PRICING STRATEGIES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Maximum Current Profit
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Survival
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Maximum Market Share
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Skimming
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Detailed explanation-1: -Survival is a short-run objective; in the long run, the firm must learn how to add value or face extinction. Many companies try to set a price that will maximize current profits.
Detailed explanation-2: -Survival-put into place in situations where a business needs to price at a level that will just allow it to stay in business and cover essential costs. For a short time, the goal of making a profit is set aside for the goal of survival. Survival pricing is meant only to be used on a short-term or temporary basis.
Detailed explanation-3: -Survival: Involves the formulation of a short-term price objective to face the fierce competition. The price of a product is reduced to increase sales volume. However, this strategy does not work in the long term as an organization would not be able to cover its costs, thus, profit margin may decrease in future.