Case of the Pricing Predicament

2) To make a price cut of 20% would be unreasonable considering the costs of JanMar are unlikely to go down. Cutting price by 20% with the same variable costs would bring their contribution margin down to 19%. To get the same net contribution of $4.2 million using their current new contribution margin, they will have to generate $22,105,264.16 in sales which is far above their past sales of $12 million and creating more volume to increase sales at this lower cost is not feasible which just one manufacturer in the Dallas Fort Worth area. (exhibit 1.3) JanMar needs to focus not on cutting prices but positioning themselves differently from competitors as a superior quality and service company since they are a privately owned, focused just in the market of southwest United States.

I have looked over the quote and it looks good. One item we would like to remove is the SWMA for Web Query $280.92.

The lowest amount the firm should accept for the contract is $2,585,000. This is the total of all of the relevant costs for the project.

Senator Jocelyn - Taking that into account, we will consider raising the offer to 6.5 million.

A. Explain what type of market structure is presented in the movie. Explain the types of strategies Joe Fox and Kathleen Kelly use to compete and maintain market power. Differentiate between pricing and non-pricing strategies (use Chapter 7 in Stengel’s textbook). You can expand and talk about potential strategies in the bookselling business even if they were not explicitly addressed in the movie.

Pilgrim Assurance is a case that involves a sealed bid auction. Therefore, the auctioneers will need to sell the building to the highest bidder involved at a minimum bid of $15 million. David Bailey is given the decision to decide on how much to bid for an office building. Furthermore, he needs to make the decision whether to lease it as office space or to convert this office space into condominiums. In this case, I will analyze the goals and objectives of Bailey as well as the other participants. The sealed bid auction indicates that they are willing to take a chance on the market and try to receive high bids. There is no problem with the government participant besides using permits to do renovations. There is

Given agreement between the two in terms of valuation, it seems likely that Greylock is likely to accept Cunningham’s proposal if the price is above $110 Million.

The price ceiling is the maximum price a seller is allowed to charge for a product or service. An impact on society includes when the prices are so high of a product, that no one can buy it. A price floor is the lowest legal price a product or service can be sold at. When market price is at its lowest, it may still be too high for consumers to purchase products. Governments can intervene for any purpose, and they are the ones who set these price controls.

The other party—the Department of Streets and Thoroughfares—did not necessarily set a reservation price for the entire project initially; rather Charlotte stated that she would want me to pay the initial 3.8 million dollar exaction

After doing some research, what is the Pricing Paradox? How is this best managed by new entrepreneurs as they make their pricing decisions?

b) Another alternative should be using the negotiation method in order to develop a “win-win” situation. A negotiating party would have to be applied, “When a long period of time is required to produce the items purchased” (p 375). In these circumstances, suitable economic price adjustment clauses must be negotiated. Opportunities for various improvements may develop, such as the new manufacturing methods, new packaging possibilities, substitute materials, new plant layouts, and new tools. Negotiation permits an examination and evaluation of all these potential improvements. Competitive bidding does not. The advantage would be assurance of a long-term business with the Company along with reasonable profit for the supplier and reasonable cost for the buyer.

1. Economics – the efficient allocation of the scarce means of production toward the satisfaction of human needs and wants.

After analyzing the results from the previous quarter, it was determined that the prices set for each segment were not sufficient. Product sales priority were also not properly adjusted. With the R&D investments, sales priorities needed to be changed for the main focus to become the most profitable market segments. Prices were not competitive which in turned decreased revenue, market share, and profitability. To become more competitive we altered the prices in each market segment. The Workhorse product was the first to change, the price was lowered to $2500 in an attempt to increase sales; at this price Team 4 was still making a profit on this product, as well as making the price much more competitive. The Workhorse sales priority was also lowered to 3rd in Americas and 4th in APAC and EMEA. This product was not selling as well as we had hoped, and was no longer as profitable as it once was which led to this decision. Next, the Innovator product’s price was adjusted; this involved a price increase to $4100. This price was adjusted to include the new

How much should he bid? (It's an option as well to withdrow from the market)

Based on these 6 factors in setting a price: selecting the pricing objective, determining demand, estimating costs, analyzing competitors costs, prices and offers, selecting a pricing method and selecting the final price, Singapore GP Pte Ltd employed 2 different pricing strategies. They are