DATA P 20 Q 2.000 R 40.000 VC 16.000 VCu = 8 FC 20.000 Q1) P/P = +20% P = +20%*20 = +4 The formula to compute Iso-Contribution change in sales volume is the following: Q = -25%*2.000 = -500 The maximum sales loss that the company can incur without hurting profits is of 500 units or -25%. Actual Change in Sales Change in Contribution = Change in Profit (%) (Units) ($) ($) 0‚0% 0 8000 8.000 -10‚0% -200 4800 4.800 -20‚0% -400 1600 1
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................................................................... 4 Format examples ................................................................................................ 9 Description of pricing and availability modifier.................................................... 9 Pricing modifiers ............................................................................................... 10 Availability modifiers ....................................................................
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given price or change in price. Selected Answer: Pricing Correct Answer: Pricing Question 2 1 out of 1 points The __________ factors that are particularly important for pricing decisions are expected consumption rate of potential buyers‚ location of potential buyers‚ and position of potential buyers. Selected Answer: Demographic Correct Answer: Demographic Question 3 1 out of 1 points __________ factors related to pricing concern how consumers will perceive prices or price
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software tool) according to the following four criteria? Option A): Status-quo pricing $4000 for the Atlantic Bundle. Option B): Competition-based pricing $6800 for the Atlantic Bundle. Option C): Cost-plus pricing $4491.04 for the Atlantic Bundle. Option D): Value-in-use pricing $8400 for the Atlantic Bundle. 2.- Think broadly about the top-line revenue implications from each of the four alternative pricing strategies. Approximately‚ how much money over the next three years will be “left
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Chapter8: pricing. April 2006 QUESTION 3 a) When companies introduce new products into the market‚ they have two broad pricing strategies: market-skimming pricing and market-penetration pricing. Distinguish these two strategies. (10 marks) b) When would price cuts and price increases be necessary? (10 marks) c) Why do businesses use cash discounts? Explain. (5 marks) April 2007 QUESTION 2 Nadeera Enterprise is a well known producer of cookies in Malaysia. The company intends
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Q1: Apple faced with two main pricing decisions for its range of iPhones. The first one is a skimming price decision and the second one is a penetration pricing decision. 1. Skimming price decision When Apple first launched the new iPhone 3GS‚ it made a skimming price decision which means it aims to sell to the top of the market and focuses on maximizing profits in short term so it could recover the research and development costs. 2. Penetration pricing decision As the iPhones have moved
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more important in buyer-choice behavior in recent decades. Price is also one of the most flexible elements of the marketing mix. Do you agree ? Unlike product features and channel commitments‚ price can be changed very quickly. At the same time‚ pricing and price competition is the number-one problem facing many marketers. SETTING THE PRICE – Let us now attempt to understand the process of how firms set prices. When does a firm set prices? A firm must set a price for the first time when it develops
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steps: • Selecting the pricing objective: • Determining demand: • Estimating costs: • Analyzing competitors’ costs‚ prices‚ and offers: • Deciding whether to use price as a competitive strategy: • Selecting a pricing method (such as markup pricing‚ target return pricing‚ value pricing‚ and going-rate pricing): • Selecting the final pricing: However‚ the theory must be modified by the influence of other factors‚ such as the health care organization’s brand strength‚ its pricing policies‚ government
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Market-skimming pricing: two examples came to my mind when I saw this concept‚ Samsung and Apple. As I know that‚ Samsung often set an extremely high price when they release a new cellphone‚ after few months the price could drop nearly 40% or even more. But IPhone never change its price. Market-penetration pricing: this often happened when a company first enters a new market. It could help to gain more customers and set a good impression that this company’s product is worth to buy. Product-line pricing: the
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Pricing Strategy Pricing refers to the process of setting a price for a product or service and more than any other element of your marketing mix‚ will have the biggest impact on the amount of profit you make. Developing an effective pricing strategy is a critical element of marketing because pricing is the only element of the marketing mix that creates sales revenue; the other elements create costs and sales volume. An effective pricing strategy will help you: meet your profit objectives
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