Collaborative Learning Community

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Module 8: Assignments Collaborative Learning Community: Pricing Decisions 1) Within your CLC, choose a publicly traded company and identify one of its products that the group will analyze. Describe the strategic implications that would need to be considered in setting a price for that product, and determine whether the group would use a market-based pricing approach or a cost-based pricing approach to setting the product price. Explain the rationale behind choosing the pricing approach. Identify the costs that the group thinks would be considered in setting the product price, and come up with a sample cost structure for the product (make it as realistic as possible). Calculate a price for the product, and defend your product price and related cost structure. We decided on Apple and the iPhone 5 is the product. There is no exact theorem for determining how to price a product but the following can act as a heuristic of sorts: Consider marketing strategy - perform marketing analysis, segmentation, targeting, and positioning. (i.e. analysing the target market for whom the product is intended and assess whether or not they can afford intended price) Make marketing mix decisions - define the product, distribution, and promotional tactics. Sum up costs; based on that determine your profit. Estimate the demand curve assess possible demand for product. A larger demand usually reduces price. Calculate cost these include the fixed and variable costs associated with the product.
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