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Introduction In the United States, CVS is the largest pharmacy retail organization. This company operates over 6100 retail stores and specialty stores countrywide and has employed over 170,000 workers. There is a necessity of offering a wider range of prescription medication options and selections system-wide in a struggle for serving the consumer base of CVS Pharmacy more consistently and effectively. The purpose of this paper is to select a more realistic good or service for an existing industry. The paper will identify the market structure, along with elasticity of the product and will also include the way the pricing will relate to elasticity of the product. Furthermore, the paper will include the way the changes in the…show more content…
Rollins, Matthew Perri, 2013). Marginal Cost & Revenue A way to determine the quantity of profit maximization is to conclude where marginal revenue equals marginal costs. Rather than computing the profit for all levels of sales; total revenue and total variable costs are considered. Marginal revenues and marginal costs are considered in a similar way like marginal profit, thus defining the amount of change for all sales’ levels (Huter, 2012, p.2). Pricing & Non-Pricing Strategies CVS needs to think through numerous elements impacting its’ business. Pricing strategies, rivals and their current products, consumer demands and suppliers are examples of these elements. For pricing strategies, CVS should consider closeouts, discounts, product bundle pricing, penetration pricing, geographical pricing, and membership or trade pricing. For non-pricing strategies, options comprise: enhanced service quality, longer opening hours, advertising, and extended warranties (Kimmons, n.d.). By pricing similar products in a different way they must focus on regional demographics because geographic pricing enables the maximization of profit. For promoting unique or new products at provisional price drops, penetration pricing is the most effective. Finally, bundle pricing and closeouts can be engaged when several
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