A manufacturer spends a large amount of money on research and development leading to the introduction of a product that is likely to present the firm with a breakthrough opportunity. The manufacturer prices the product with the goal of achieving a 20 percent return on its investment. Which of the following types of pricing objectives is the company using?
A) Target return.
B) Profit maximization.
C) Nonprice competition.
D) Meeting competition.
E) Dollar or unit sales growth.

Question

Quizplus · Accepted Answer

The manufacturer is using a target return pricing objective, as they have set a specific profit margin they want to achieve based on their investment in research and development.

A Manufacturer Spends a Large Amount of Money on Research