Objectives of Price Policy

OBJECTIVES OF PRICE POLICY
A PRESENTATION BY
RAHUL SOWANE
What do you mean by POLICY?
A plan or course of action, as of a government, political
party or business intended to influence and determine
decision, actions and other matter.
PRICE POLICY
A detailed study of the market structure gives us information

about the way in which prices are determined under different
market condition.
Factors of Price policy
Select the pricing objectives
Determining demand
Estimating costs
Analyzing competitor-cost,price,offer
Selecting a pricing method
Selecting the final price
PRICING OBJECTIVES
Target
return
Profit
oriented
Maximize
profit
Unit sales
growth
Pricing Sales
objectives oriented
Growth in
market share
Meeting
competition
Status QUO
oriented
Non Price
competition
OBJECTIVES:-
Stability of price in food items.
Aggregate demand should be equal to aggregate supply.
Provide necessary incentive to stimulate the production
of necessary goods.
Protect vulnerable section of commodity.
Should maintain the relationship between agriculture
price, prices of manufacture & price of various services.
Maximize long & short run profit.
increase market share.
Obtain a target rate of return on investment (ROI)
Match competitors prices
Survival
Social, ethical, or ideological objectives
Discourage competitors from cutting prices
Obtain or maintain the loyalty and enthusiasm
of distributors and other sales personnel
Avoid government investigation or intervention
Discourage new entrants into the industry
Company growth
PRICE POLICY BASED ON:
Profit Oriented :
This type objectives target is to achieve the high profit, having the below two
major technique to reach,
Target Returns:
The vendor specifies a specific dollar amount or percentage amount that the
price will be offered at in order to make a profit which has been calculated for a
specific purpose.
Maximize Profits:
The Competitive Market is not intense may charge the highest price the market
will bear because sometimes and may have an advantage for reasons based on
the geographic advantage
 Special features not available on other competitors’ products.
 Very famous brand
Sales Oriented :
This type objectives target is to achieve the high sales, having the
below two major technique to reach,
 Sales Maximization:
 Short-term objective to maximize sales of the product
 Ignores profits, competition, and the marketing environment
 Used to sell off excess inventory in some case.
 Market Share: To increase the market of shares of the particular
industries product.
Status Quo Oriented:

Status Quo meets most of the competitions in industries and to get the
pricing level of the particular product.
Meet the Competition:
 Customer has many choices, and the vendor have resources to stay in
the market, then just charge the same price. If the vendor does not
have the resources to survive a price war and vendor don’t have the
ability to claim better quality.
 Some other pricing objectives are related with pricing strategies to be

considered in the pricing objectives preparation.
Skimming Policies:
 A Skimming policy is more attractive if demand is there are no close
substitutes.
 Products that people will pay a high price for because there is nothing
else they can buy there is close to the item.
Penetration Pricing:
 To make it too intimidating for competition to follow.
 To enter the market in a competitive environment.
 Part of a brand building unique.
Discount Pricing:
 This may be occurred seasonal.
E.g. . 50 % discount in textile stores at the festival time.
 This based on the buyer purchase volume or amount bought.
E.g. Buy more than 10,000 get any free gift
• Value Pricing
Focus on
customer
requirements
Target market
and
competetion
Fits with
strategy
planning
Objective of oil price policy
As far as possible, the prices should cover at least the
minimum costs of production and distribution.
Prices may earn some revenue for the Government;
Prices are varied in an attempt to maximize consumer
satisfaction;
Prices are used as an anti-poverty measure to rectify
malaises arising out of skewed income distribution; and
Prices are manipulated to provide the structure for
economic growth, both at micro and macro level."
Objectives of agriculture price policy
1. To meet the domestic consumption requirement govt.
promotes balanced increase in production.
2. To provide price stability in the agricultural product.
3. To meet the national targets by the planner.
4. To provide the wheat to consumer to reasonable price.
5. To provide raw material to the industries at reasonable

price.
6. To increase the production and exports of agricultural

product.
Objectives of food Price policy
Maximization of the quality of food grains brought by the
producer for sale in the market.
Acquisition by the state of such proportion of the total
available supply as would be adequate to give the state as
commanding position in the market to influence the price
level of food grains.
Equal amount of distribution of food grain which the state
procure.
Maintain a price structure of food grain which is free from
violent fluctuations and it yet flexible all time.
THANK YOU

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OBJECTIVES OF PRICE POLICY

A detailed study of the market structure gives us information

Status Quo Oriented:

 Some other pricing objectives are related with pricing strategies to be

2. To provide price stability in the agricultural product.

3. To meet the national targets by the planner.

4. To provide the wheat to consumer to reasonable price.

5. To provide raw material to the industries at reasonable

6. To increase the production and exports of agricultural

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