Relationship between Pricing Constraints and Pricing Objectives

Concept: Pricing Objectives

Student Question: “While pricing objectives frequently reflect corporate goals, pricing constraints often relate to”​

​​conditions existing in the marketplace.

Explanation: A pricing constraint can be defined as a limit, either internal or external, that limits a forms ability to set price. Virtually all competitive firms are at the mercy of the conditions existing in the marketplace. For example, a company may want to rise prices for additional profit, but it will lose customers to competitors if it fails to stay within industry expectations. Pricing constraints are most often the result of competition and consumer demands in the market, but they may also come in an regulatory forms – such as price ceilings, rent controls, etc.

 
  • Student: Sanjaya Malhotra
  • Textbook: Marketing
  • Course: MKT 421
 
 

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