MARKETING
7th Edition
ISBN: 9781260087710
Author: Grewal
Publisher: RENT MCG
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Chapter 15, Problem 3MA
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To determine: Price of the phone.
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A phone manufacturer is determining a price for its product, using acost-based pricing strategy. The fixed costs are $100,000, and thevariable costs are $50,000. If 1,000 units are produced and thecompany wants to have a 30 percent markup, what is the price of thephone?
What is the most effective price adjustment strategy for small businesses in highly competitive industries, and why do you believe it is the best approach? Which among the Product Mix Pricing Strategies do you think is the best to be used when you are in the food business? Why?
What is meant by pricing? Describe any three strategies that can be done by firms if they do not want to increase the price of a product.
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- A study indicated that the optimal price for a consumer product is $32.45. Most products in the market sell for $29.99. What price would you suggest to retailers for selling the product and why? A haute cuisine restaurant is opening down the street, and its owner asks you for advise on pricing. Should you suggest that the restaurant price an appetizer at $6.99 or $7, and why?arrow_forwardThe cost of doing business and establishing retail pricing are directly related to a business’s bottom line. Therefore, if there is a change in the cost of goods, it will affect the profitability of a business that has set prices for its products. 1. How might profitability and market share be affected if retail pricing fluctuates depending on the cost of raw materials? 2.Why do you believe that to be the case? 3. Why is it important that a company’s pricing objectives fit well with its marketing objectives? Please number your response for each question (1, 2, and 3).arrow_forwardDoes "value" mean the same thing as "low price"? How do these concepts differ? Pick two competing brands from a familiar product category (watches, perfume, consume electronics, restaurants) - one low priced and the other high priced. Which, if either, offers the greatest value? Why might the strategy for setting a product's price need to be changed when a product is part of a product mix? What are the five product mix pricing strategies? Provide an example of each. (4 points) Alicia is a self-employed hair stylist who owns her own salon. She has asked you to consult with her on how to generate more revenue. Using the price adjustment strategies discussed in the chapter, advise Alicia on her options to increase sales. Please be detailed in your response with why you are choosing each.arrow_forward
- At a strategic meeting of your company, other managers in the meeting want to know the company’s pricing objectives. Asthe manager responsible, critically analyse alternative pricing objectives the company is pursuing.arrow_forwardshort answer Moving on from Product to Price, review the following pricing strategies. A skimming strategy prices the product high to make big profits while there’s little competition. A penetration strategy uses low price to attract more customers and discourage competitors. Demand-oriented strategy starts with consumer demand rather than cost. Competition-oriented strategy is based on all competitors’ prices. Price leadership strategy attempts to force all competitors to follow the pricing strategy of one or more dominant companies within an industry. What pricing strategies do you see being emphasized in marketing activities today? Give a specific example of a product that is obviously priced according to one of the pricing strategies listed above.arrow_forwardCompare and contrast research-based profitology pricing vs marked-up pricing strategy. As a seasoned sales consultant of marketing with the responsibility of pricing goods and services for a firm, discuss and explain the pricing strategy you used to price women’ summer straw hats that were expected April 27, but were recieved July 10, due to shipping discrepancy. Please be sure to provide examples to support your case for the pricing strategy used.arrow_forward
- 1. How is customer-based pricing related to the role of price in the commercial exchange versus the role of the other three elements of the marketing mix? 2. Describe the concept of a product’s VTC. Why is the monetary estimation of this value important for price setting? 3. Describe the concept of a product’s reference value. How would you calculate the reference value for a consumer product whose package size is different than the package sizes of all of its competing products?arrow_forwardThe advantage of using the cost-plus pricing strategy is: Select one: a. It considers market and customer information b. It ensures that the business covers all product costs and earns a profit. c. It removes any costs that do not add value to the product. d. It looks at the relationship between price and quantity demand.arrow_forwardSuppose a manufacturer of exercise equipment sets a suggested price to the consumer of $395 for a particular piece of equipment to be competitive with similar equipment. The manufacturer sells its equipment to a sporting goods wholesaler who receives 25 percent of the selling price and a retailer who receives 50 percent of the selling price. What demand-oriented pricing approach is being used, and at what price will the manufacturer sell the equipment to the wholesaler?arrow_forward
- Discuss the following the Ebay company, Select a single product for your firm and set a price according to multiple pricing approaches. Cost-based: Use best estimates for materials and labor costs. Use a reasonable percentage of price as an estimate for all overhead expenses – usually from 10% to 50%. Economic Value to Customer: Describe how you determine this price level; then do so.arrow_forwardWhich pricing objectives will you use for your product? Consider the product life cycle, competition, and product positioning for your target market during your discussion. PlayStationarrow_forwardThough organizations sometimes base pricing decisions on the cost of materials, another option is to base price on perceived customer value. Choose a product and estimate the perceived value of that product as a function of customer benefits and customer costs. Compare your estimate to the actual price charged for the product. What modifications to the price would you recommend?arrow_forward
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