Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a ________ pricing strategy.

When you use an indicator like a return over something else (in this case over the investment) the demand is around having a margin over a quantity, so the indicator in this case could be operational margin or net margin but all of the over the sales.

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bcrinitiative bcrinitiative · Answer 2 · 2020-02-18T15:59:07+01:00

Answer:

The answer is: Target return pricing strategy

Explanation:

Target return pricing is the process of setting prices based on an estimate of a competitive market price. Thereafter, a firm's required return or target profit margin is added to the price to determine a final selling price. Based on this final price, the cost of production is estimated so as to determine the cost constraint per manufactured item or unit of service provided. Naomi has determined that the return on investment is 20% . This margin would be added to the price to arrive at a final selling price for the industrial building supplies after which cost constraints would be set.