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प्रश्न
State two disadvantages of Cost plus pricing policy.
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उत्तर
- It is very often difficult to determine accurately the cost per unit due to common overheads and joint products. The method involves arbitrary allocation of costs in such cases.
- The method ignores the nature and level of demand. The resulting price may, therefore, be out of line with market conditions.
- It fails to reflect competition in the market.
- The mark-up on the cost of the product is not fixed but may change with changes in demand. In practice, the rule of thumb methods are used to determine the mark-up.
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संबंधित प्रश्न
It is also known as ‘going rate pricing’ or competition based pricing.
The strategy of introducing new product in existing market is classified as ______.
Under this Pricing Strategy, a business firm adjusts its own price policy in accordance with general pricing structure in the industry.
______ determines the sales volume and the profit margins.
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"Competition based pricing is ideal for non-branded products." Comment.
“In a competitive market, parity pricing is the appropriate strategy.” Justify either for or against.
What is Cost plus pricing policy?
What are the conditions under which parity pricing is desirable?
What pricing strategy will be used to launch a high-end smart phone?
