ABSTRACT
Price is the only activity marketers engage in that produces revenue for the firm. All other marketing activities represent expenditures while pricing managed properly can make a major difference in the firm's revenue and income. Pricing for products and/or services must be congruent with the rest of the marketing plan. Managing price properly also means thoroughly understanding costs as well as customers. There is a lot of data to support the idea that a firm that has the largest market share also is the most successful in a particular industry. Generally speaking, pricing objectives can be divided into three major types (Perrault et al., 2010): profit-oriented, sales-oriented, or status quo-oriented. To develop a pricing strategy, the manager must consider many factors. For marketing managers, developing reliable costs to use in pricing decisions is often a frustrating process. Activity based costing (ABC) allows a firm to more accurately determine what costs should be assigned to particular product lines and customers.
