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?
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The J.C. Penney department store chain is currently through a major cost-cutting program, associated with its … Continue reading...
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?
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Credit unions are like small banks that usually only offer services to individual customers (that is, non-businesses). … Continue reading...
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...
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...
As part of the marketing mix, pricing is an aspect that can help communicate and reinforce the firm’s positioning. For many consumers, price also acts as a guide to quality. In this activity, there is a key pricing decision to be made in the two situations presented. Keeping in mind … Continue reading...
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?
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Brand |
Positioning/Marketing |
Price |
In this activity, your task is to set the price for a new home-delivered spring water (the large bulk bottles) company. To complicate matters, you have a few different viewpoints on the best pricing approach. What would you decide?
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Spring water is a product that has become popular … Continue reading...
Firms need to take care when responding to competitor’s action with a pricing change, as this could trigger a potential price war. Therefore, in this activity you need to identify what would be the most appropriate pricing reaction for the following generic situations actions.
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This activity requires you to determine a price solely based on what value your product generates for the customer. As there are only insignificant variable costs involved, what price would you set?
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Assume you are the marketing manager for a large sales training company. Over many years, your firm … Continue reading...
Here is a hypothetical situation that you could potentially face in your career. Assume that you decide to start a business as a marketing consultant. Complete the following activity to determine how much would you charge for your consulting services?
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A charity organization has approached you to write … Continue reading...
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?
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Ken: … Continue reading...
Many consumers are surprised at the (profit) margin that some retailers make on their sales. However, they do need fairly large margins to cover their significant rent and staff costs that they incur. In this activity, your task is to determine what average prices will need to be charged by … Continue reading...
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...
As the term suggests, target profit pricing is designed to determine how many units we will need to sell to both cover costs AND achieve a set profit. In some firms, marketers are allocated a profit contribution goal/target for the year, and they will use this approach to estimate the … Continue reading...
Often a firm will calculate the break-even point for a price. That is, if we set the price at $X, then how many units will we need to sell to cover costs (that is, our break-even point). Work through the following two examples to gain a better understanding of this … Continue reading...
Cost-plus pricing is a very simple form of pricing. This approach was once fairly common, but is less widespread today. Your task for this activity is to work through the following two examples to gain a better understanding of this approach.
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Using cost-plus pricing to:
Pricing decisions will form a key part of the firm’s overall marketing strategy. In this activity, your task is to identify why the firm has adopted their particular pricing approach.
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