This activity is important because pricing plays a pivotal role in a firm achieve its goals. pricing objectives involves specifying the role of price in an organization's marketing and strategic plans. marketing managers choose the product’s price based, in part, on the firm’s pricing objective, which may include profit, sales revenue, market share, unit volume, survival, or social responsibility. the goal of this exercise is to demonstrate your understanding of the different pricing objectives.

Total marketing effort is a term used to describe the critical decision factors that affect demand: price, advertising, distribution, and product quality. define the variable x to represent total marketing effort. a typical model that is used to predict demand as a function of total marketing effort is based on the power function: d = axb suppose that a is a positive number. different model forms result from varying the constant b. sketch the graphs of this model for b = 0, b = 1, 0< b< 1, b< 0, and b> 1. (we encourage you to use excel to do this.) what does each model tell you about the relationship between demand and marketing effort? what assumptions are implied? are they reasonable? how would you go about selecting the appropriate model?