Question

An analysis of a prospective product shows that sales for it are expected to grow by at least 10 percent each year over the next five years before it enters the maturity phase of its product life cycle. This type of analysis would provide useful information in which step of the price-setting process

Answer 1

Answer: A. identifying pricing objectives and constraints

Explanation:

It is in the above mentioned stage of the Price Setting Process that the sales growth rate and business stages are accounted for as constraints or objectives to be met.

In identifying the pricing objectives and constraints, the expected growth rate should be factored in to find out what price the goods can be sold at to ensure that sales grow at the required rate for example.

Answer 2

Answer:

This type of analysis would provide useful information in which step of the price-setting process will be in Step 1: Selecting the Pricing Objective.

Explanation:

To understand the concept succinctly, let us peruse the meaning and steps of price-setting processes

What is the Pricing Process?

Pricing Process can be defined as a process of determining the value that is received by an organization in exchange for its products or services. The price of a product is influenced by several factors, such as manufacturing cost, competition, market conditions, and quality of the product.

Here are the steps on how to set a price product:

Step 1: Selecting the Pricing Objective. ...

Step 2: Determining Demand. ...

Step 3: Estimating Costs. ...

Step 4: Analyzing Competitors' Costs, Prices, and Offers. ...

Step 5: Selecting a Pricing Method. ...

Step 6: Selecting the Final Price.

Therefore, the First Step "Selecting the Pricing Objective," is the best option considering the following factors:

The company first decides where it wants to position its market offering. The clearer a firm’s objectives, the easier it is to set price. Five major objectives are:

• Survival
• Maximum current profit
• Maximum market share
• Maximum market skimming
• Product-quality leadership