MARKETING 2018
19th Edition
ISBN: 9780357033753
Author: Pride
Publisher: CENGAGE L
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Chapter 19, Problem 6DRQ
Summary Introduction
To determine: Break-even point in units and dollar sales volume.
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Students have asked these similar questions
Describe what you are selling (1 item only):
What is the price you will sell at to sustomer:
How will you explain to potential customers WHY they should buy your product?
If your total costs to run the company is $5,000 per month, how many do you have to sell each month
to cover your costs? Show your calculation!
Do you think this is a realistic number to achieve each month? Explain your answer.
In case sales go slower than expected, come up with a volume discount offer for customers and
describe how it will work in the box below:
(for example if you buy 5 items instead of 1, you will give customer a 10% discount).
Pricing
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: write the following procedures and formulas for calculating price?
a. Cost Plus pricing
b. Breakeven pricing
c. Return on investment pricing
d. Value based pricing
Q: Write the methods for determining pricing of new products?
Pricing
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?
Chapter 19 Solutions
MARKETING 2018
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- 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_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_forwardA 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_forward
- If the target selling price is $120 and the target profit margin is a 40% mark-up on cost, what is thetarget cost?arrow_forwardWhat profit-based pricing approach should a manager use if he or she wants to renect the percentage of the firm"s resources used in obtaining the profit?arrow_forwardExplain the six-step process in setting company’s pricing policy with proper example? Describe, in as much detail as possible, If you don't able then please skip it.arrow_forward
- 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_forwardList and explain four key influencers on pricing decisions . A new customer ABC Ltd, wants to buy 500 units of your product, but is only prepared to pay RM4 per clock. This will not cover the total cost of making the product, but it will cover the variable costs – anything over RM3 makes a Provide and discuss three factors that you would take into account when deciding whether or not to take the order.arrow_forward7 ? Which of the following is true of the price equation? ? ?Extra fees are not part of the price equation ?The amount paid by customers is always the same as the quoted price ?Sellers subtract the add-on charges from the list price ?Customers are more inclined to pay additional fees than a higher list price 8 ?What is the difference between a marketing plan and a business plan? ?A marketing plan addresses the financial projections of an organization, whereas a business plan does not A marketing plan contains a description of an organization, whereas a business plan does not contain any description A marketing plan deals with marketing actions, whereas a business plan addresses the entire organization ?A marketing plan contains details on operations, research, and manufacturing, whereas a business plan does not 9 ?What must an organization use to determine its position respective to the competition during the new-product strategy development stage? ?SWOT analysis and environmental…arrow_forward
- The 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_forwardYou are making a special hot chocolate that costs you $0.45 per serving. You sell each serving for $3.50. What is the beverage cost percent?arrow_forwardYou have taken a summer job in the windows and doors department of a large home improvement store. During sales training, you learn about the products, how to best address customers’ needs, and how to sell customers the best product to fit their needs regardless of price point. One day your manager informs you that you are to recommend Smith Windows to every window customer. Smith Windows are more expensive and don’t really provide superior benefit except in limited circumstances. The manager is insistent that you recommend Smith. Not knowing what else to do, you recommend Smith Windows tocustomers who would have been better served by lower-cost windows.The manager rewards you with a sales award. Later the manager tellsyou that he received an all-expenses-paid cruise for his family fromSmith Windows. What, if anything, should you do with this information?arrow_forward
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