Pricing by Using Target Cost Approach: A Field Study in the Sector of Saudian “Pharmaceutical Industry”
DOI:
https://doi.org/10.56830/WRBA07202302Keywords:
Pricing, Target Cost Approach, Saudi Pharmaceutical IndustryAbstract
The pricing decision is considered one of the most important managerial decisions, due to its effect on the profitability for the short and long terms, so developing of cost systems becomes a vital matter, should be dealt with is in objectivity and scientifically to achieve the optimum decisions in this field.
The increasing importance of this research study that it’s mentioned one of the modern pricing methods, known as the formal objectively cost in pricing.
The study came with the aim to define and clear the reality of used price mechanism style in the field of saudy pharmaceutical industry and how much relevant or convenience to the current developments and improvements in the multiform of competitions, then rising high the used pricing methods through suggesting modern pricing formal depending on fierce price competition in the market as abase for pricing decision-making.
Both hypotheses in the research study were examined in the mentioned field due to the present big and high competition.
The practical data of the study have been collected through the direct watch and personal conversation. In addition to that we also design a questionnaire as well as we applied the analytical study style.
The study came out with the following main results: showing main factors effecting pricing decisions and these are: customers, competitors, and cost; adopting traditional pricing methods within globalization and free trading which unable the competition within the common price in the competitive markets; target cost approach which represents a pricing method, planning profit system, and cost management in the competitive environment.
The main recommendations of the study are: developing cost systems in order to improve decision making, adopting target cost approach in pricing in order to improve decisions related to pricing. The companies related to this study must create programs, and specialized developed training courses in pricing to splay its employees with the up-dates in this field.
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