product pricing objectivesuggest a company or product likely to use each pricing objective. a.) 5% increase in profits over the previous year  

3 Answers

literaturenerd's profile pic

literaturenerd | High School Teacher | (Level 2) Educator Emeritus

Posted on

I would have to agree that a 5% increase may not seem like much for the consumer (especially if the product price is low already).  Also, a 5% increase in profits shows the consumers that the company is not trying to gouge the buyers.

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

The most likely company to have such an objective would be one that is relatively well established.  A 5% increase in profits is not a huge increase and therefore would not seem very good for a new and rising company.  So this would be more appropriate for a company like, for example, McDonalds.

rrteacher's profile pic

rrteacher | College Teacher | (Level 2) Educator Emeritus

Posted on

Option e) would certainly apply to some sort of luxury item, like a high-end automobile or a designer watch. Most businesses have more of an interest in competitive pricing, but those companies attempting to establish a niche might try to raise their prices in the interest of pitching their product as luxury, or high quality.