Assalamualaikum and good day, students.

Today, we are going to talk about a very important topic in business – Pricing Objectives.

Now, what does that mean?

Pricing objectives are the goals or reasons why a business sets a product at a certain price. Every business has a reason when they choose their price – and this reason must match their business plan.

Let me explain with some simple examples from Malaysia.

1. To Make Profit

Many companies want to earn more than what they spend.
✅ Example: A nasi lemak seller at a night market in Kuala Lumpur buys ingredients for RM2 and sells it for RM4. The profit is RM2. That’s her pricing objective – to make profit.

2. To Increase Sales Volume

Some businesses want to sell more units even if the profit per item is small.
✅ Example: Mr. DIY sets lower prices to attract many customers. Their goal is to increase sales volume, not to sell one expensive item.

3. To Compete in the Market

Some companies price their products lower or similar to their competitors to stay in the market.
✅ Example: Tealive might offer a promo drink at RM5 when Chatime offers RM6, just to keep their customers.

4. To Create a Premium Brand

High prices can show that a product is exclusive or luxurious.
✅ Example: Tudung brands like Naelofar or Duck sell tudungs at higher prices to show quality and exclusivity.

5. To Survive

Sometimes, a company just wants to cover its costs and continue operating.
✅ Example: During MCO, some restaurants offered cheap meals to survive even with little profit.

✅ In Summary:

Pricing objectives help a business choose the right price based on what they want to achieve – profit, more customers, survival, or market share.