Apparel Industry Management

Apparel Industry Management 3(3+0)

Lesson 23 : Pricing

Cost and Demand-Based Pricing

When setting prices, managers must take into account the firm's goals and strategic plan. Over the long run, a firm must sell its products at prices that will cover costs and provide a profit. In the short run, however, pricing strategies may be designed to impact a particular phase of the firm's growth, development, or profitability. Determining an appropriate pricing strategy requires careful evaluation of the market including positioning of competitors and product demand. There are two types of pricing strategies discussed here: cost-based strategies and demand-based strategies.