Notes on Pricing Decisions In this note‚ we will discuss the pricing of a given product or a service. We will only discuss the pricing of an individual product/service and not the pricing across a set of products in a product line. Thus in the discussion that follows‚ we assume that the pricing decision of the product/service under consideration has no bearing on the profitability of other products/services in the portfolio of the firm. 1. Overview of the Pricing Decision: While making
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-Pine As pine is a cost effective building material‚ which is incredibly versatile and strong‚ it is used a considerable amount in todays product industry. Pine can be finished in a variety of ways including that of waterproofing it‚ so it can be used in moisture rich environments. One way of achieving this is by applying Briwax to the surface of the wood using a small cloth or a ball of wire wool‚ and rubbing it into the grain with a circular motion. -Steel Steel is an alloy of iron and a small
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consider about maximizing profit later. ②The second stage is to determine demand. So‚ Cumberland has to consider consumers’ price sensitivity - in this case sensitive to quality. Therefore‚ we should think about the benefit to consumers (in question 1-2 EVC) ③Third step is to estimate costs. Since the average number of CMI pads need per year is 204‚750(question 2)‚ the number of CMI pads per month is about 17‚000. So‚ the additional capacity cost is $5‚025‚000 because additional equipment is added at
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1. What’s your price for the curled metal pads? Why? 2. How attractive an opportunity is this for CMI? 3. How are you going to market these pads? Describe your marketing plan. 4. What are you going to say to the Colerick Foundation? Exhibit 1: SWOT Analysis | | | | Strengths | Weaknesses | CMI was one of the largest manufacturers of curled metal products in US with an 80% market share | CMI’s sales were dipping and management was not optimistic of maintaining
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Curled Metal Incorporated has declining sales‚ but has developed a new product (curled metal pile driver pads) that‚ in field tests‚ deliver customer benefits that are many times CMI’s manufacturing costs. Joseph Fernandez and Rajiv Sanwal of CMI’s Engineered Products Division are responsible for formulating a strategy for the new product. A key issue is the price to charge for the pads. The case raises issues of analyzing market potential‚ aligning price with business strategy‚ and the implications
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9-580-104 REV: AUGUST 16‚ 1985 BENSON P. SHAPIRO JEFFREY J. SHERMAN Cumberland Metal Industries: Engineered Products Division‚ 1980 Robert Minicucci‚1 vice president of the Engineered Products Division of Cumberland Metal Industries (CMI)‚ and Thomas Simpson‚ group manager of the Mechanical Products Group‚ had spent the entire Wednesday (January 2‚ 1980) reviewing a new product CMI was about to introduce. (See Exhibit 1 for organization charts.) The room was silent‚ and as he watched
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CASES FROM MANAGEMENT ACCOUNTING PRACTICES Table of Contents Case 1: Case 2: Bal Seal Engineering Robin Cooper Bill’s Custom Planters William Stammerjohan Deborah Seifert Dublin Shirt Company Peter Clarke in assoc. with in assoc. with Paul Juras Wayne Bremser ECN.W William Lawler Endesa Gary M. Cunningham Scott Ericksen Francisco J. Lopez Lubian Antonio Pareja Kincaid Manufacturing Jon Yarusso Ram Ramanan Osram.NA John Shank Lawrence Carr William Lawler Pleasant Run Children’s Home Brooke E. Smith
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Lack of incentives for distributors to sell MWX Thayer School of Engineering 11/4/2010 End-User EVC of Kathon MWX 6 Compare costs incurred by end-user who does and does not use Kathon MWX Not Using MWX Fluid Concentrate Purchase Fluid Disposal Risk of Fluid Disposal $ $ % Using MWX $ $ % EVC = Reference Value + Differential Value Thayer School of Engineering 11/4/2010 End-User EVC of Kathon MWX 7 Assumptions Maintenance biocides extend fluid life indefinitely 1 Gal Undiluted
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its EVC potential.¡¨ Primary economic activity of ENDESA is oriented towards geographic diversification (diversified market expansion) and diversified portfolio of business activities. The company follows a clear strategy of holding and developing units with high or potentially high EVC and selling those with low potential EVC. The desired focus of ENDESA is the interrelationship between managers and shareholders and each business unit is hold responsible for driving value. 2. Why does EVC as
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Pricing Note on Behavioral Pricing (HBS note) and Tweeter etc. Alternative: Coca-Cola’s New Vending Machine (A): Pricing to Capture Value‚ or Not? 3. Value-Based Pricing Atlantic Computer: A Bundle of Pricing Options (HBP Brief case) Alternative: Curled Metal Inc.-Engineered Products Division 4. Pricing Structure Virgin Mobile USA: Pricing for the Very First Time Alternative: XM Satellite Radio (A) American Airlines‚ Inc.: Revenue Management Dolan & Gourville Bell & Nashem Steenburgh & Avery 506021
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