Loctite Corporation

6. How does the current reimbursement level of $140,000 per case affect a decision to use or not use marginal cost pricing? Does the amount of excess capacity affect the decision? Why?

For instance, there are generic principles of pricing of desired net income, competitive position, and market structure. According to (Cleverly, Song, & Cleverly, 2011), every business must generate enough revenue through its sales of products and services to sustain its operations and provide for the replacement of its physical assets as well as provide a return to its investors. Partners Healthcare System and among other organizations must recognize levels of pricing, so inadequate pricing doesn’t accumulate to lead to business disaster.

The minimum price is based on how much CMI spends producing one pad, and how much profit the company wants to generate. For estimating the total

Compare to Thomas & Blake’s shopping analysis. Millard’s needs make the price range of the better regular classification a bit higher from $80 to $120. Also, the price range of the better big/Tall classification need to be adjusted higher from $50 to $90 in order to meet the need of the customers who used to shop at Thomas & Blake.

CMI was first manufacturer for CM pads, there was no direct competition and no available selling price in the market that CMI can take reference to. In view of that, CMI could use two test results of Kendrick and Corey to determine the economic value of CM pads. According to the Appendix I, the average economic value of CMI pad was 3,304. This value had taken into account of less CM pads required per job and the cost saving in equipment and labor . But the value to the customer should be higher due to some intangible advantage, for examples, lower accident claim as fewer set changes required for CM pads. Besides, lower health claim as CM pad contained non-toxic material. In order to gain the market share for this new product, we would recommend CMI to set the price of CMI pad around 85% of economic value, saying 2,805, promote to the market that it was much cheaper to use CM pads with superior performance and cost efficiency. Besides, different discounts can be granted to the customers depend on the length of the contracts signed and volume of the pads purchased, ranging from 10% to 25%.

Based on competitor price points in number three and the positioning strategy of Show Circuit , the recommended price point for a case of Show Circuit would be $12.00. This is a recommended price point because it is aligns with Show Circuit’s position strategy and it is just slightly higher than the highest competitor price. Also, the contribution to fixed cost is higher than its competitors.

By reducing the price, Jones Blair will be more competitive with other brands. Right now, Jones Blair is prices significantly higher than all other brands and when a consumer sees the brands side by side at a store, they may not realize the higher quality of Jones Blair paint, just the higher price and immediately select against.

This price will be more difficult to communicate and will not readily appeal to the unsophisticated price-sensitive buyer.

These price comparisons depend on which region the customer is from, but these prices are very close to the situation at Imboden Arkansas (¶2). Alexander’s list covers more price comparisons, but these three items alone show a savings of $3.09 to the customer.

While performance may be the most important aspect to professionals, price is more important to an

(1.98 is also reasonable select. Since there is no brand image or loyal customer, it's not big problem to price very low as long as defend VC. Profit is only $4000, but as long as the business continues it's better than nothing.)

1. Before beginning any case, students should familiarize themselves with the model being used. Marketing Engineering for Excel comes with tutorials that demonstrate the capability of each model. The tutorial can be found under each model within the ME►XL menu after starting Excel. These tutorials are designed to work with our OfficeStar examples which are located in the My Marketing Engineering directory, usually installed in My Documents during software installation. The data required for this case is located in two files in the My Marketing Engineering directory (usually located within My

Was to focus on convenience and "coolness" of the product. Price was not an issue!

Finally, considering that users of CAs are divided in three purchasing buckets (greater than 10 lbs., between 1 and 9 lbs., and less than one lbs.) and the average price of Superbonder ($37.45) is far less than the price of BAM to end user ($175), for the BAM customer to make financial sense for such a purchase, he will need to buy more than a lbs. of CA a year. Hence, Loctite target companies for the BAM equipment should be firms who purchase CAs more than once a year (size of the company irrelevant based on case information).

I suggest pricing the BAM so it will have similar profit margins compared to Loctite’s other pieces of equipment, which is about 25% when selling to distributors and 33% when selling to end users (excluding selling expenses). This means that the aluminum BAM would be priced at $165 for distributors and $185 for end users (costs from p. 5).