The traditional economic theory holds that the prime purpose of any business set up, especially for the commercial minded, is profit maximization. Profits and income is the source and means to ensure the continuation of the company’s existence. It is true that a business undertaking has the right to make profit as it established by the owner(s) as a means of survival, however it is important to realize how and at what cost are these profits made.

However, this should not be the only goal of any company for a very basic reason that there exist other groups in an organization (shareholders, managers, employees, customers, etc.).Goal setting is the key here, the goals should be pre-described. A certain level of profits, not a higher or unachievable, must be aimed for. During years of good sales reserves should be build up and use the same reserves during years of low sales. This ensures steady revenue to the employees as well as saves the company from any set back.

What works better for an organization, whether profit maximization or sales maximization? A company can make profit through consumer satisfaction. Giving consumer satisfaction while also capturing a larger market share by initially sacrificing the profits can help the company in the long run. This is done by either lowering the sales price or by increasing the production; however the former method is gaining precedence. The company which has a larger market share gets the power of pricing in the market, thereby forcing other companies to cut their prices. Such a company gets the benefit of dominating the market in the long run.

However, if your competitors are equally powerful, there are less chances of making substantial gains in the future. Such is the scenario in mature markets, where customer satisfaction forms the core of strategies applied in such a market. The aim here remains to retain the customers by providing add on services, as it is more difficult to sway customers once their loyalty is achieved. Consumer satisfaction remains important means of achieving profit maximization.