Question

Marketing Final

What would be your response to the statement, “Profit maximization is the only legitimate pricing objective for the firm”? Explain and include the impact of COVID 19 in your answer. (30 points)

Answer 1

To explain this statement I would like to take the example of Netflix at this time of covid-19. As we all know due to this situation around the world, the living modes of quarantine and social distancing are getting adapted to prevent the spread of virus. To promote these activities many government agencies are taking initiatives to make people familiar about the home indoor activities to make them stay at home. And that is what Netflix also did. By focusing on staying at home activities, Netflix in many parts of the world has reduced its price of the subscription to make the social impact and deliver the message to all of its consumers to stay at home, pay lesser prices and watcg unlimited streaming online. This message and this promotional idea has made a strategic impact and made the sales of Netflix boosted up by 80-90% in these two months. Also, because of this promotional technique people have been staying at home and avoiding social contact and watching Netflix at their home to make their time pass. This price cutting strategy not only have a cultural and social impact on people but using the right strategy at the right time made Netflix achieve its profitability objective as well because demand increases at large when prices go down. Thus, Netflix has achieved not only its profit objective but also made a good brand image in the society and in front of all its consumers being a socially responsible company. Thus, profit maximisation shouldn't be the only legitmate pricing objective. One should also focus on society for the achievement of goals.