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SOME ONE ASKED THE CAMEL THAT WHICH IS GOOD FOR YOU ? WALKING UPWARD WITH LOAD ON YOUR BACK OR WALKING DOWNWARD ?====== HE SAID TO HELL WITH BOTH........... FOR A SALES MAN IN HIS CARRIER HAS TO WORK ON BOTH THE AREAS YOU MENTIONED......... QUESTION IS HERE HOW YOU WILL BE PAID AFTER CHOOSING FROM THESE????????
This will be depend on your pricing objective
1- survival strategy which can be implemented in case of economic recession , high market degree of rivalry or low market differentiation so in this case try to survive by decreasing your profit and try to increase your sales as you can
2- skimming strategy and in this case try to get the maximum possible profit even if it will affect your sales volume
another answer will depend upon your relative market share and company strategic objective
1- if you want to increase your current market share ( units or money wise ) that means you have to decrease your price , decrease your profit and increase number of units sold which called penetration strategy and upon acquiring market share you could increase your price and profit graduaaly
2- if you want to maintain or even decrease your market share ( get rid of some unprofitable or less profit customer ) that means you have to increase your profit margin even if the sales volume is affected
third parameter is the market degree of elasticity ( demande and price relation ship)
if you work in elastic market which means that increasing price and profit will dramatically affect sales volume , I will choose high sales volume with low profit
if the market is inelastic which means that increasing price and profit will not affect sales volume so much , I will choose to increase profit
At that given point of time if the margins earned are healthy then one can play around with it in future deals.
It's like, if one has enough excess margins earned over and above the set bottom line then the flexibility is available to use the excess to increase the sales revenue and sales quantity.
Another factor can also be taken into consideration which is the cost of sales. Generally cost of high value and voluminous sales are effectively low compared to low value sales.
Thirdly, opportunities of post sales service revenue is also taken into account to decide on such deals. Obiviously, high volume sales generates bigger opportunities for high service revenue.
Other valuable points mentioned earlier by others will also have an impact.
Depends upon the holding cost and turnover of the Inventory.
For low holding cost and high turnover we can prefer and choose the first option.
Otherwise cases better to go for "Low Sales high profit" option.
High Sales with Low Profit - When your product or its substitute product are abundently available in market or it is a mass marketed product then you should adopt this strategy to maintain your market share, to leverage your factory production capacity.
Low Sales with High Profit -When your product is target for some premium class segment customers then you can adopt this strategy to maintain brand positioning in market.
Always choose high sales with low profit.Reason is that the more you sell, means goods will not stand long in stock, and cash flow is constant.
Directly concerned with the Culture of beneficiary. The Culture of beneficiary determines the Quality and sales and after all, the margin for profit (high or low).
1) The product differentiation.
If the product is well differentiated and adds more value choose option2.
If the product is not differentiated from other offerings and choosing alternatives is much easier , Go for option1.
2) The type of product.
