J.C. Penney’s Cost-cutting Transformation

In this mini-case, you will review the efforts of the J.C. Penney department store to more efficiently compete on price, primarily underpinned by a cost-cutting program. But is this the best approach?

 

ACTIVITY/TASK

The J.C. Penney department store chain is currently through a major cost-cutting program, associated with its … Continue reading...

A Pricing Strategy Success?

In the following case study, your task is to determine whether the firm should continue with its current strategy (which is mainly priced-based) or does it need to adopt a new approach?

 

ACTIVITY/TASK

Credit unions are like small banks that usually only offer services to individual customers (that is, non-businesses). … Continue reading...

Pricing against aggressive competitors

Retailers often face the challenge of deciding between ‘everyday low pricing’ and ‘high-low’ pricing. As suggested by the names, the first approach uses a consistent low pricing approach, where the second approach utilizes higher prices combined with frequent specials/discounts. Your task is to help determine what would be the best Continue reading...

Cost Leadership

One of the key requirements for achieving success as an ongoing price discounter is to create a cost leadership position. That means that the firm has built some cost advantages over their competition.

This activity quickly highlights some of the practices that Aldi Supermarkets (a relatively new discount supermarket in Continue reading...

How Important is Price?

In this exercise, you are presented with eight product alternatives, as you would find in a supermarket environment. As you will see, price is simply one aspect of the consumer’s perception of value. So review the following list of pasta sauces, which one would you buy?

 

ACTIVITY/TASK

Brand

Positioning/Marketing

Price

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Responding to Competitor Pricing

While it is generally acknowledged that it is best to stay out of a price-cutting war, sometimes competitor actions will force you into one. In this activity, your firm is restaurant C and one of your competitors has recently cut their prices. The question is how you will respond.

 

ACTIVITY/TASKContinue reading...

Price Penetration or Price Skimming?

The following is an excerpt from a manager’s meeting for firm that produces entertainment/game consoles (like PlayStation, Xbox, Wii). They are trying to decide whether to use a price penetration or price skimming strategy in the upcoming launch of their game console. Can you help them decide?

 

ACTIVITY/TASK

Ken:                Continue reading...

Price Calculations – Marginal Analysis

Marginal analysis is based on the assumption that as the product’s price alters, so will its level of demand (sales). Therefore, this approach looks for the maximum profit point, when considering the firm’s cost structure and the likely sales at different price points (which is essentially the product’s demand curve).  Continue reading...