All Exams Test series for 1 year @ ₹349 only
Question

After determining its pricing objectives, what is the next logical step a company should take in setting its pricing policy ?

This question was previously asked in
UGC NET 2015 Paper 2 Management Question Paper (28-Jun-2015)
The correct answer is

Determine the demand of the product

Option 2 — Determine the demand of the product is correct.

Kotler lays out a six-step procedure for setting a price. After a firm decides WHY it is pricing (its objective — survival, maximum current profit, market-share leadership, etc.), the next logical step is to gauge how much customers are willing to buy, because demand sets the ceiling on price.

StepActivity
1Selecting the pricing objective
2Determining demand
3Estimating costs
4Analysing competitors' costs, prices and offers
5Selecting a pricing method
6Selecting the final price

Demand and costs bracket the price: demand fixes the upper limit (what buyers will pay) and cost fixes the floor. Estimating costs (step 3), studying competitors (step 4) and choosing a method (step 5) all come later.

Takeaway: In Kotler's pricing sequence, demand determination immediately follows the setting of pricing objectives.

Was this answer helpful?

Similar Questions

  1. Find the most appropriate sequence of life-cycle of price for a product, from the initial stage to the mature stage.

  2. The practice of selling below cost, with an intention to destroying the competitor is referred to as :

  3. Select the correct sequence of steps in setting a pricing policy:

    (a) Determining Demand

    (b) Analysing competitors' costs, prices and offers

    (c) Selecting the Final Price

    (d) Selecting the Pricing Objective

    (e) Estimating costs

    (f) Selecting a pricing method

    Codes:

  4. The price setting method most closely corresponding to the concept of product positioning is:

  5. A company prices a 2 litre bottle of its mineral water at ₹ 30 but 60 ml of the same water in a moisturizer spray for ₹ 75. This is an example of which one of the following pricing practices?

  6. When the Companies pay less attention to its own costs or demands and bases its price largely on competitors’ prices, then it is known as :

  7. The practice of selling below cost, with an intention to destroying the competitor is referred to as:

  8. After determining its pricing objectives, what is the next logical step a company should take in setting its pricing policy?

  9. Find the most appropriate sequence of life-cycle of price for a product, from the initial stage to the mature stage.

  10. Pricing decisions are most complex at which stage of the product life cycle?

     


Important Questions from Pricing decisions

  1. Pricing practice of setting a price target and then developing a product that would allow the firm to maximise total profit at that price is called:

  2. Which of the following is the characteristic of price?

  3. In which of the following price adjustment strategies. a company reduces prices to reward customer responses such as volume purchases, paying early or promoting the product?

  4. The consumer's price sensitivity is / are influenced by

    A. Who bears the cost

    B. What percentage of total expenditure does the product represent

    C. Who bears the cost and type of retailer from where customer purchases

    D. Consumption of product by the customer

    E. Knowledge about the product

    Choose the most appropriate answer from the options given below:

  5. Which of the following are the informal pricing methods ?
    I. Cost plus
    II. Competitive
    III. Rate of return
    IV. Trial and error
    Codes :
Need Expert Advice?
Test Series
UGC NET img
Teaching
UGC NET Library and Information Science 2024 - 2025 Mock Test Series
66 Tests 4 Tests Free
793 Attempts
4.4(17)
English, Hindi
More Questions from UGC NET

Start Your Preparation with Prepp Mobile App

Download the app from Google Play & App Store
Download the app from Google Play & App Store
Prepp Mobile App