Chapter 11, Problem 11.19CC

Summary Introduction

Case summary:

Company CH is the main vender of handbags in the Country U selling $5 billion organization worth of handbags each year. All financials have developed strongly in the past 4 years. Company CH has made this progress through value added pricing. Quality, style or design, the value of the brand has grown-up. The bags are expensive; however moderate to even cheap contrast with the higher-end stuff from Company PD and Company GC and other brands. It is optimistic, yet inside reach.

The issue the organization currently faces is that it is losing share in the Company U. Different elements add to this, including expanded competition. But, there is additionally criticism that Company CH may have overestimated exactly how high of a price customers are eager to pay. This case analyses the difficulties a premium-priced brand faces as it ends up mainstream across demographics.

Characters in case: Company CH, Company PD, Company GC and Company U.

To discuss: The ways price affects customer perceptions of Company CH.

A pricing strategy considers portions, capacity to pay, economic situations, contender activities, trade margins and input costs, among others. It is focused at the characterized customers and against contenders.