Chapter 4 Lesson 4

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Washington County Community College *

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160

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Marketing

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Jan 9, 2024

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docx

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2

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NAME _________________________ Entrepreneurship & New Venture Practice Chapter 4 The Marketing Mix – Product & Price Read Chapter 4, Lesson 4.4, in text. The Marketing Mix – Produce and Price 1. Why are product features, branding, and positioning important? Product features, branding, and positioning are important because they draw the correct customer base in. 2. What pricing objectives are most important to a new business? Prices that maximize sales, increase profits, discourage competition, attract customers, and establish an image are all important to a new business. 3. In the blue jeans market, which brands are positioned to satisfy customers’ needs for high quality and status? Which brands are positioned to satisfy a need for inexpensive clothing? Describe the consumers of each of the brands you name. Levi's are made for high quality and status. They cost around $50-$100/pair. Consumers of Levi's are typically men and women who want quality, durable jeans that are known for being the best. If you're looking for inexpensive jeans, Old Navy is the place to go. Their jeans are still good quality, they look nice, and the price range is around $20-$40/pair. Consumers shopping at Old Navy are looking for inexpensive but stylish jeans. This usually includes moms, students, and low income. 4. What do you need to consider when pricing services? When pricing services, you need to consider the return on your investment. You also need to consider what price your customers will feel comfortable paying. 5. Which method of pricing do you think is most effective? Why? I believe that competition- based pricing is the most effective. This way, you aren't under or over-selling yourself. Once you know what your competitors are charging, you can figure out if your product or service is worth more or less than theirs and price based on that. 6. Name and explain the three methods of determining prices. Time-based pricing is when you charge a certain amount per hour/day/etc for your services. Cost-based pricing is when you use the wholesale cost of an item as the basis for the price charged. Demand-based pricing is determined by how much customers are willing to pay for a product. 7. Which method of pricing do you think is most effective? Why? I believe that competition- based pricing is the most effective. This way, you aren't under or over-selling yourself. Once you know what your competitors are charging, you can figure out if your product or service is worth more or less than theirs and price based on that.
B USINESS USINESS M M ATH ATH 8. A shoe store owner pays a manufacturer $54 a pair for a popular brand of athletic shoes. The store offers the shoe to customers for $129 a pair. What is the markup percentage? (See page 110 for example.) 9. The shoe store owner decides that the shoes are not selling quickly enough. The store has a sale offering a 30 percent markdown on the shoes. What is the sales price? (See page 110 for example.) The sales price is $90.30 10. Answer for question 8. The markup percentage is 138.889% page 2 of 2
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