Making a Price Decision
In this activity, the task is to set the price for a new home-delivered water company. To complicate matters, there are a few different viewpoints on the best pricing approach.
Pricing
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, students need to counter when one of their competitors cuts their prices – how will they respond?
Competitive Pricing Responses
Students need to identify what would be the most appropriate pricing reaction for various market situations and competitive actions.
Value Pricing – A Tough Decision
This activity requires students to determine a price solely based on what value the product generates for the customer. As there are only insignificant variable costs involved, what price is right?
Setting Your Price
Students assume that they decide to start a business as a marketing consultant. How much do they need to charge for their consulting services?
Price Penetration or Price Skimming?
This activity follows the discussion in a manager’s meeting for a firm that produces entertainment/game consoles and they are trying to decide whether to use a price penetration or price skimming strategy in the upcoming launch of their game console.
What Price Mark-up is Needed?
In this activity, the student task is to determine what average prices will need to be charged by these small retailers so they end up making a good profit.
Price Calculations: Marginal Analysis
Students set prices using marginal analysis. This pricing approach looks for the maximum profit point, considering the firm’s cost structure and the likely sales at different price points
Price Calculation: Target Profit Pricing
Students use target profit pricing to determine how many units we will need to sell to both cover costs AND achieve a set profit.
Price Calculation: Breakeven Pricing
Work through two examples of using break-even analysis for pricing, to gain a better understanding of this approach.
