What is the key concern for firms using target return pricing?

The key concern for firms using target return pricing is the rate at which profits are generated relative to investments. This pricing strategy is designed specifically to achieve a certain return on investment (ROI). Firms set their prices based on the desired profit margin that corresponds to their invested capital, ensuring that they meet financial objectives.

By focusing on the rate of return, businesses can evaluate the effectiveness of their pricing strategies against the capital they have invested. This means that the pricing must not only cover costs but also generate a return that meets or exceeds the target set by the company.

While other aspects such as total profits, market demand, and market share can influence decisions and strategies, target return pricing distinctly emphasizes how profit in relation to investment impacts overall business objectives.