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What is Target Costing in Marketing? PDF Download

Learn Target Costing definition in marketing with explanation to study “What is Target Costing”. Study target costing explanation with marketing terms to review marketing course for online MBA programs.

Target Costing Definitions

  1. Pricing that starts with an ideal selling price and then targets costs that will ensure that the price is met.

    Principles of Marketing by Philip T. Kotler, Gary Armstrong

  2. Deducting the desired profit margin from the price at which a product will sell, given its appeal and competitors' prices.

    Principles of Marketing by Philip T. Kotler, Gary Armstrong

Target Costing Explanation

Target costing is a way to deal with decide an item's life-cycle cost which ought to be adequate to create determined usefulness and quality, while guaranteeing its ideal benefit. It includes setting an objective expense by subtracting an ideal overall revenue from an aggressive market cost. An objective expense is the greatest measure of cost that can be brought about on an item, notwithstanding, the firm can even now acquire the required net revenue from that item at a specific selling cost. Target costing disintegrates the objective expense from item level to segment level. Through this decay, target costing spreads the aggressive weight looked by the organization to item's fashioners and providers. Target costing comprises of cost arranging in the plan period of generation just as cost control all through the subsequent item life cycle.

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