Overview

target pricing


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The establishment of a selling price based on competitive target market penetration or price points rather than building up from standard costs. In doing this, a target profit to be made on the product is set. Therefore the cost for the product is arrived at by subtracting the desired profit from the competitive market price. The formula is therefore:

Target Market Price − Desired Profit = Target Cost

See also pricing.

Subjects: Marketing.


Reference entries

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