Different business has several different objectives in mind when setting a pricing strategy. We all know that pricing is a very important thing to marketing and development of value packages. Price is also a critical ingredient in consumer evaluations of the product. Here are some popular objectives business wants to meet over time.

• Achieving a target return on investment or profit. Ultimately, the goal of any business of whatever industry is to make a profit by providing goods and services to others.
• Building traffic. Establishments often advertise certain products at or below cost to attract people to the store. The objective is to make profits by following the short-run objective of building customer base.
• Achieving greater market share. Some businesses are using price incentives (quality) to gain market share in their industry.
• Increasing sales. Sometimes a firm will lower prices to increase sales. This move could hurt profit margin in the short run, but will enable the company to become more financially secure in the long run. The prices could again be raised after sometime.
• Creating an image. Certain products are priced high to give them an image of exclusivity and status.
• Furthering social objectives. Some companies intend to set low price so that people with less money can afford the product.

Note: Short-run objectives differ from long-run objectives. Both should be understood at the beginning and put into the strategic marketing plan. Pricing decisions should be influenced by other marketing decisions regarding product design, packaging, branding, distribution, and promotion since all of those are interrelated.

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