Question

The marketing manager of Raven Golf Club finds that the club can increase its market share of it slashes membership prices during the first quarter of the year. However, it would mean that the club will not achieve its target return on investment. This conflict illustrates

Answer 1

Answer:

Conflicts arise between pricing objectives, so sometimes you need to trade-off profit maximizing pricing objectives for market share maximizing pricing objectives, or vice versa.

Explanation:

Your pricing objectives can be either a price that maximizes profit, or a price that maximizes market share and sales volume.

The problem is that most of the times you cannot set one price that will achieve all the possible pricing objectives.

For example, if you want to maximize profit, your price will be high, but your sales volume will be small. If you want to increase your market share, you must sell your products at a low price.