MARKETING; CONNECT ACCESS
7th Edition
ISBN: 9781260985788
Author: Grewal
Publisher: MCG
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Chapter 15, Problem 3MA
Summary Introduction
To determine: Price of the phone.
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Students have asked these similar questions
How can a business that is using "ideal standards" to set prices under a cost-plus method (specifically the Product Cost Concept), actually set the selling prices of their products too low?
Does "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.
Consider the advertisement for a gutter cleaning service shown below.
What is the external reference price in this ad?
According to the course material, an advertisement could attempt to frame a price as a single loss, as two losses, as a gain and a loss, or as a gain foregone. Which one of those framings is this advertisement attempting to accomplish? Explain your reasoning.
If your internal reference price for gutter cleaning service was $125, how would you perceive this advertised price of the company’s gutter cleaning service? Would you perceive it as a single loss, as two losses, as a gain and a loss, or as a gain foregone? Explain your reasoning.
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- Week after week, consumers shop for many of the same groceries. At some point, the product may be priced the same and look the same as before but with less in the package. If consumers are not made aware of the change, is this deception? Is this different from deceptive pricing? Over the past several years, careful shoppers may be spending about the same amount of money at the grocery store but leaving the store with a lighter load in their grocery bags. Food prices on many items have increased, and food manufacturers are facing the same challenges as consumers. With increases in raw materials and transportation, making a profit requires a very sharp pencil. According to Phil Lempert, editor of SupermarketGuru.com, “The reality is, if you look at USDA projections, food is going to get more expensive. And as a result, food companies are going to do one of two or three things: Raise prices and keep packages the same, or reduce the quantity in the package. Or do a little of…arrow_forwardList the general approaches to pricing. Select examples of products that you regularly use. i. Notice the price of each of these items For each item, ii. State the main benefits you are looking for in using the product. iii. Does the price communicate the total benefits sought? iv. Does the product’s price suggest good value? v. Do you think the manufacturer or retailer is overcharging or undercharging consumers for the product?arrow_forwardPricing Q: What are different factors that should be considered by marketers before deciding price of the product? Q: How the total cost is determined/calculated by company for deciding price of the product? Q: What is breakeven point? How is it calculated? Q: How the net profit is calculated? Q: Consult your book and write the following procedures and formulas for calculating price? Cost Plus pricing Breakeven pricing Return on investment pricing Value based pricing Q: Write the methods for determining pricing of new products?arrow_forward
- Explain how a brand of a commonly purchased consumer packaged goods, such as toilet tissue, could be skim-priced? A service provider has decided to charge his customers P5, 000 for every upholstery cleaning service. The customer thinks that it is a steal , since the service provider is doing a great job and thinks that it could have costed them at least P7, 000 had they agreed to the first service provider that they went to. The total cost to the provider is P2, 000 which include the cleaning materials and labor. Identify the ceiling price and floor price of the service. Should the service provider decide to increase his price to P6, 500, do you think it is still acceptable to the customer? Why? Give an example of a situation where a price that is low with respect to the product’s VTC would not serve as an incentive to buy. What would be the implications of this for the use of a penetration strategy for pricing his product? RESEARCH: What is a pioneer advantage? Describe…arrow_forwardLook at some real estate want ads in your newspaper. Enter the price of a two-bedroom home and a three-bedroom home. If you find some abbreviations you do not understand, ask your teacher.arrow_forwardSuppose you have been asked by a food company to design an experiment that examines consumers’ purchase intentions toward their product (i.e., cereals), as a result of their recent pricing strategies (i.e., low price, high price) and product quality (i.e., organic offerings, nonorganic offerings) strategies. Basically, they would like to know the best combination of product quality offering and pricing strategy that yields the highest levels of consumers’ purchase intentions. How would this experiment look like? When working on this assignment, you should consider the following: Subjects: The experiment participants should be customers who consume significant breakfast cereals and are diverse in terms of income group, age group and work type. Experimental conditions: Independent variables – quality (categorical), price Dependent variable – Propensity to pay Effects: The main effect shall be impact of independent variables on propensity to pay such as how much affect does quality or…arrow_forward
- 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?arrow_forwardUsage-based pricing (UBP), also known as consumption-based pricing, is a pricing model that enables customers to pay for a product according to how much they use it. The metric used to measure usage corresponds to how the customer is extracting value from the product. True or False?arrow_forwardWhen a carmaker offers different types of models under a particular brand, such as the Mitsubishi Montero Sport utility vehicle that is offered as GLX (around 1.2 million pesos), GLS (around 1.4 million), and GTV (around 1.7 million) variants, is this an example of product length or of product depth? Explain.arrow_forward
- Week after week, consumers shop for many of the same groceries. At some point, the product may be priced the same and look the same as before but with less in the package. If consumers are not made aware of the change, is this deception? Is this different from deceptive pricing? Explain.arrow_forwardFancy Fashions sells jeans for $59 and sweaters for $39, To increase sales of jeans and sweaters, Fancy Fashions promotes this Product Price Bundle: "Buy a pair of jeans and a sweater for $98'. Will this Product Price Bundle will work well to increase the sales of jeans and sweaters? Explain your answer in no more than 2 bullet points.arrow_forwardOver the past year, you and your friend have decided to embark on a new business venture, you have created a new recipe for baked bread. You are currently paused at the pricing stage, considering that there are no specific guidelines for setting the right price. Outline 5 aspects that you need to consider when developing a price of your new product offering. Justify your answerarrow_forward
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