Effect of Pricing Policy on Profitability Level of an Organization

Effect of Pricing Policy on Profitability Level of an Organization. A Performance appraisal of some selected manufacturing firms.

Pricing Approaches

In many organizations, approaches to pricing take different forms (Adeniji 2002; Drnry 2000 and Pandey 1998):

(i) Hunch: This is borne out years of experience in that business, such decision are intuitive and are not based on any partaking analysis of available data.

(ii) Market Price: This is based on the going price in the market and then works backwards to allowable production costs. Such approach is adopted for standard, stable easily substituted products where close cost controls are employed which mass production and mass selling method are used: [Read more…]