In: Economics
Explain the impact of pricing objectives, consumer price sensitivity, and environmental factors on pricing decisions.
Answer--The impact of pricing objective on pricing decisions directly impacted the sales of the goods and services,all the company's objective is to increase the sales of the goods and services which is company's are offering to the customers ,a balance price or competitive price in the market can influence the target of sale of goods and services thats why the pricing decisions are taken by the company's in a manner which can raised the demand of the goods and services.Pricing objectives also influence the profit of the company by targeting return on the investment for the production of goods and services.
The impact of consumer price sensitivity on pricing decision --Price sensitivity to consumers defined as the degree by which the price of the product matters for the consumers behaviour or choice and it also decides that how much consumer going to purchase goods and services at which price,that's why all the company's try to set the price of the good and services which is competitive in the market ,it also helps in the pricing decisions of the company's that at what price demand will be the maximum by consumers.
The impact of environmental factors on pricing decisions--Environmental factors refers as factors which is uncertain and can take place at any time ,change in the political system leads to the changes in the economic policies,changes in technologies also influence the price of the goods and services and the biggest factor is change in taste and preference of the consumers these factor also pointed out by the financial planners to set the prices and these factors impacted as the increase or decrease in demand of goods and services by the consumers.