Your prices must reflect value to which customers will respond. Before pricing your products, consider the role of pricing in broader marketing and organizational strategies. You can use five long-term pricing objectives. B. Pricing for Profit 1. Most for-profit marketers use pricing to support their profit objectives.
Profit is what remains after paying for costs and expenses out of sales revenue.
You can set pricing objectives to meet specific targets for profit returns. You can also use pricing targets for gross margin , the amount that remains after deducting the cost of goods sold from sales revenues. To increase gross margin you can raise prices, lower the cost of goods sold, or do both. Pricing for gross margin can be tricky. Many marketers use pricing to maximize current profits, trying to make the highest profits now.