Assumptions of classical economic theory states that every company always choose the price that can generate the highest profits. This goal is known as profit maximization. In an era of global competition, increasingly complex conditions encountered and the more variables that affect the competitiveness of each company, making it impossible for a company to know the exact price level that can produce the maximum profit. Therefore, there are also companies that use the profit target, the appropriate rate of return or profit targets appropriately. There are two types of commonly used profit targets, margin targets and target the ROI (Return On Investment)
2. Destination Oriented Volume
In addition to profit-oriented goals, there are also companies that set prices based on goal-oriented to a specific volume or commonly known as volume pricing objective. Prices are set in such a way in order to achieve the target sales volume or market share. This goal is widely implemented by airlines.
3. The purpose Oriented Image
Image (image) of a company can be formed through pricing strategies. Companies can set a high price to establish or maintain the prestigious image. Meanwhile, the low price can be used to form the image of a certain value (image of value), for example by ensuring that the price is the lowest price in a given region. At the bottom of both high-and low pricing aims to improve consumer perceptions of the overall mix of products offered by the company.
4. Purpose of Price Stabilization
In a market where consumers are very sensitive to price, when a firm lowers its price, the competitors have to lower their prices as well. Such conditions establishing the goal of price stabilization in certain industries (eg petroleum). Stabilization goal by way of set prices to maintain a stable relationship between the price of a company and the price of industry leaders (industry leader).
5. Other objectives
Price can also be set with the aim of preventing the entry of competitors, maintain customer loyalty, repeat sales support, or to avoid government intervention. Pricing objectives above have important implications for corporate competitive strategy. Goals set must be consistent with the way in which the company in determining its relative position in the competition. For example, the selection of profit objective implies that the company will ignore the price of its competitors.