F. Livesey (auth.)'s Pricing PDF

By F. Livesey (auth.)

ISBN-10: 0333184793

ISBN-13: 9780333184790

ISBN-10: 1349156515

ISBN-13: 9781349156511

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If the market is one subject to rapid innovation and the introduction of new products then it becomes appropriate to adopt a shorter time horizon in respect of existing products, to maximise short-run profits without too much heed to longer run considerations. ) (v) The costs that are involved in changing prices. These will normally be greater the greater the number and the wider the variety of the outlets through which the product is sold. Finally, it should be noted that even in those circumstances where downward flexibility might generally be inappropriate, selective flexibility, that is to say the reduction of the prices of some of the company's products, or for some of its customers, might be desirable.

The problem is of course that one cannot anticipate with any reasonable degree of certainty what the level of opportunity cost will be, and accountants are reluctant to include any cost which cannot be quantified. Given this degree of uncertainty absorption costing can be seen as a rather crude alternative, as a method of imposing a charge for the use of facilities which may have alternative uses, in the future if not at present. Absorption costing may then be justified, not on the grounds of equity but as a rationing device.

The Analysis of Data Derived from Informed Opinion Perhaps the main advantage of the hypothetical over the in-store experimental method is its lower cost. A way of further reducing the cost of data collection is by seeking the views of people who are in contact with consumers: wholesalers, retailers, or THE PRICE AWARENESS AND SENSITIVITY OF CONSUMERS 43 the manufacturer's own staff. By reducing the size of the sample, and by utilising data which already exists (albeit not formally documented) within the firm, the cost of data collection is reduced.

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Pricing by F. Livesey (auth.)

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