Universal Car Rental Pricing Simulation (Havard Busines School Pricing Simulations)

The board of directors met to discuss the possibility of changing our pricing and making a couple changes to the policies. The board decided to make the following changes:

Therefore, each division should be autonomous in its decision making. This, however, is not the case with our company. As a matter of fact, the corporate office is influencing and forcing divisions to make the buy and sell decisions from each other at the instructed price of 1.25 times of full production costs. To be a true profit center, the divisions should have the authority to determine and negotiate prices of their products either based on market or through internal resources to ensure profitability. In addition, to be able to ensure operational excellence, managing the costs such as production cost, administrative and selling overheads, should be a priority.

“How much to increase capacity depends on (1) the volume and certainty of anticipated demand; (2) strategic objectives in terms of growth, customer service, and competition; and (3) the costs of expansion and operation” (Russell & Taylor, 2011, p. 259).

CarMax (Nasdaq: KMX), was established by Sharp when he took a gander at the $150 billion utilized auto advertise and saw three qualities that persuaded him the Circuit City way to deal with retailing could be joined onto the utilized auto market: to begin with, the supply of utilized autos was plenteous; second, the interest for utilized autos was reliable; and third the administration rehearses utilized inside of the divided business were unsophisticated. Similarly as numbers for CarMax goes, in the second from last quarter it came to make back the initial investment of $0.00 per offer contrasted with $0.31 a year prior and from $0.00 per offer from the past quarter.

Jim O’ Brien made an observation that a portion of Hardee’s customers have a higher profit rate than others. Hardee has a history of using discounts and published tariff taxes to establish their prices. Although discounts are attained through freight volume, this may have to change due to the fact that the employees work volume is higher than the freight volume. Based off this information, Jim expects a new service demands for his consumer to be troublesome to cost and price because it will no longer be based on freight volume; the new demands will include but not be limited to merge- in-transit, event management, continuous shipment tracking RFID capability, and dedicated customer service personnel. With all this new found knowledge Jim and the pricing managers for Hardee Transportation, is attempting to find a new pricing method that will benefit their customers and themselves; they must find a pricing method

4. Evaluate key pricing considerations and strategies relative to the product life cycle of your client’s

My goal at the beginning of the simulation was to gain $4,000 by the end of my senior year to buy a car. My strategy to meet this was to invest in the consumer goods sector, as I was guessing that with the holidays coming up, the increased sales would drive up the stock price. I also invested in the transportation industry (i.e. automakers and aerospace/defence corporations) as there is always a demand for transport on all levels from personal cars to airliners and I knew that several new car/concepts would be released near the end of the simulation due to the Detroit auto show.

CONSUMER TASTES | How many customers will sign on the line for a new car? Incentives from one dealership force the hand at others. Consumer taste affects which

In marketing, as a cost leader with product lifestyle focus, our strategy was to produce products of quality and durability at the lowest price possible in order to gain a quick competitive advantage in the marketplace while keeping internal costs to a minimum. Over the years, our budgets gradually increased. Price for Traditional segment diverse according to the frequency of R&D. Low-End prices were placed low since customers are highly price sensitive in Low segment. Products price in High-end, Performance and Size segment were placed relatively high since we innovated and updated the products by R&D each year to meet customer demands. Andrews continued to maintain a premium pricing structure in the High-End, Traditional,

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The emergence of high-low pricing tactics materialized out of an earnest desire to retain a profitable margin of sales. Usually, this pricing strategy involves a period of high, often subjective, initial prices followed by a period of low discount prices. One can attribute the effectiveness of using the

Summary: The focus this week was on uncovering any and all existing data related to the Pricing Desk process. Any metrics that measure the cycle time is of extreme importance.

Most are sold through franchised dealerships, although up to 5% of deliveries go to institutional buyers (mostly rental companies)

This journal demonstrate that the relationship between 4S shops distribution intensity of cars and brand new car buyers’ choices in the U.S. automobile market. Different from price, effect of advertising, promotional activities and other factors, distribution intensity changes relatively slow, but the distribution intensity will be affected some variables, thereby might affect decisions of consumers buying cars. Additionally, this article used information on the U.S car sales transactions gave by the Power Information Network, which included the accurate geographic locations of consumers and dealers. Non-probability sampling method was used in 55 4S shops as a samples. Dealer accessibility, dealer concentration and dealer spread would determine distribution intensity and then will largely affect the choice of the people for the car brands.

In the meeting a new price of $475 was put forward by the design team. As Tony Barren didn’t want a situation to be like when he and his team launched sonar project, he thought the pricing was fair enough. But still difference of opinion prevailed. The sales team believed that the price was in the higher side and we wouldn’t be able to sell the product. They felt the price was not competitive and we would lose our market share. There were arguments that the product could be introduced into the market at $425 and further changes could be incorporated later. There were even suggestions of dropping the product. There prevailed a ‘go/no-go’ situation about the product launch.