What is competition oriented pricing policy, Managerial Accounting

Assignment Help:

Competition oriented pricing policy

Most companies fix the price of their products after a careful consideration of the competitor's price structure. Deliberate policy may be formulated to sell its products in the competitive market. Tree policy alternatives are available to the firm under this pricing method:

1) Parity pricing or going rate pricing: under this method the price of a product is determined on the basis of the price of competitor's products. This method is used when the firm is new in the market or when the existing firm introduces a new product in the market. This method is used when there is a tough competition in the market. The method is based on the assumption that a new product will create demand only when its price is competitive. In such a case. The firm follows the market ledger.

2) Pricing below competition level or discount pricing: discount pricing means when the firm determines the price of its products below the competitive level i.e., below the price of the same products of the competitors. This policy pays where customers are price the method is used by new firm entering the market.

3) Pricing above competitive level or premium pricing: premium pricing means where the firm determines the price of its product above the price of the same products above the price of the same products of the competitors. Price of the firm product remains higher showing that its quality is better. The price policy is adopted by the firm of high repute only because they have created the image of quality producer in the minds of the public. They became the market leader.

 


Related Discussions:- What is competition oriented pricing policy

A local retail shoe shop , Shoe Shine is a local retail shoe shop located o...

Shoe Shine is a local retail shoe shop located on the north side of Centerville. Yearly demand for a popular sandal is 500 pairs, and John Dirk, the manager of Shoe Shine, has been

Accounting Ratios, Explain TWO limitations of using accounting ratios to as...

Explain TWO limitations of using accounting ratios to assess the performance of a firm and suggest how each limitation may be improved

What is fixed budget, What is Fixed budget The fixed budget is prepare...

What is Fixed budget The fixed budget is prepared for a given level of activity the budget is prepared before the beginning of the financial year. If the financial year starts

State overhead expenses, State overhead expenses It is to be noted tha...

State overhead expenses It is to be noted that the term overheard has a wider meaning than the term indirect expanses. Overheads include the cost of the indirect material and

Financial, IF net income totaled $18,000 for one year, beginning assets wer...

IF net income totaled $18,000 for one year, beginning assets were $100.000 and ending assets were $140,000, then Return on Assets for the year as a percentage will be?

Marginal returns and negative marginal returns, 1) What is the difference b...

1) What is the difference between decreasing marginal returns and negative marginal returns?   2.) "A firm in monopolistic competition maximizes its profit by producing where it

Z or t statistics, Z or t Statistics If n ≥30 we use Z, if, n Ho:  B ...

Z or t Statistics If n ≥30 we use Z, if, n Ho:  B = O that is, there is no relationship between X and Y HA:  B≠ O There is a significant relationship between X and Y The l

Break even Analysis, I am part of a marketing group, and we are working on ...

I am part of a marketing group, and we are working on a project for a local cable company,they currently serve 3,200 customers and sell 50 wireless boxes a month,what I need to do

Compute the expected return and risk of a portfolio, Compute the Expected R...

Compute the Expected Return and Risk of a Portfolio? The subsequent data are presented to you as a portfolio manager Security Expected Return

MAKE OR BUY DECISIONS , MAKE OR BUY DECISIONS (NO LIMITING FACTORS) The...

MAKE OR BUY DECISIONS (NO LIMITING FACTORS) The choice between making and buying a given component is one which is likely to face all businesses at some time.  It is often one

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd