to charge a price that both covers all its costs for producing, distributing and selling the product and delivers a fair rate of return for its efforts and risk. To price wisely, management needs to know how its cost varies with different levels of production. For example; the Dockers pants that cost more money to produce have a target which has a higher income than for the Levi’s jeans, other aspect is the difference in the level of sales (jeans are sold at least twice more than the Dockers pants). Thus, management must decide who within the organization must set the prices. In a company like Levi Strauss price is handled by divisional or product line managers.The price the company charges will be somewhere between one that is too low to produce a profit and one that is too high to produce any demand. For the same product aimed at different market segments, marketers sometimes choose different pricing objectives. Although, price is generally assumed as a significant issue for the customer, the type of product, the target, the needs and the desire but also the value that the buyer assign to the product meaning how much money is he or she willing to spend in order to possess the product. Thus, the marketers evaluate all the information available in order to determine how far above the competition his firm can set its prices. Each price the company might charge will lead to a different level of demand, in the normal case demand and price are inversely related: that is the higher the price is the lower the demand will be, that is where the target change everything. Levi’s for example will set two different prices for its jeans whose target is more likely to be teenagers, men, women, or we should say everybody. Thus, the price will be slicely different from the one given to the Dockers pants which are targeted to an other type of people or an other type of occasions, so the company will be more likely to charge a higher price fo...
