The Profit Price Based Organizations

1535 Words Aug 10th, 2015 7 Pages
Profit Profit price based organizations are based around two main ideas one is target return and the other is maximizing profit (From the expert: Price objectives or orientation. (n.d.). Maximizing profit is a challenging aspect in business because the company needs to find a price point at which customers are happy, while also maximizing returns and profit. The company that comes to mind is Reliance Steel and Aluminum Co. Reliance is the largest metal service center in the world and now is over a 10 billion dollar fortune 500 company. Reliance sells steel B2B on a daily basis with the intention of maximizing profits. The pricing strategy of discounting and allowances for steel really depends on the market and the value of steel in the US and around the world. Reliance has to have a very fluid pricing strategy in place to make adjustments depending on the currently volatile steel market. There are certain customers that have loyalty to the Reliance name and then there are others that shop solely based on price and the lowest cost available. Reliance prices their steel based on each individual account and the reason for that is to maximize profit and return.
Sales
Organizations which utilize a sales orientation to set pricing are trying to increase revenue through an increase in the number sales of their offerings (Grewal, 2014, p. 429). An example of an existing organization which uses a sales oriented pricing strategy is Tiffany and Co. Tiffany and Co. is a…
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