Pricing Worksheet

docx

School

Madison Area Technical College, Madison *

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Course

101

Subject

Marketing

Date

Feb 20, 2024

Type

docx

Pages

Uploaded by ChefPowerBarracuda29

MP M arketing P rinciples online Rather than a discussion board this week, you will complete the following pricing questions and submit back to your grade center. Proofing and grammar count for total points awarded. Pricing Questions – 16 points Weekly Tasks - MP Week CH 14 - Pricing Concepts for Establishing Value (8 Points) 1. Think about a business (identify it in your answer) from which you regularly make purchases even though there are competing firms with similar prices. Explain what the firm offers that improves value and keep you coming back. (4 pts) A business that I regularly make purchases from is Kwik Trip. In terms of what makes it of better value to me is the friendliness of the workers as well as the cleanliness of it compared to other gas stations/convenience stores. I also know that when I do go in I am able to find exactly what I need. 2. If a shoe company has $1 million in fixed costs, its average shoe sells for $50 a pair, and variable costs are $30 per unit, how many units does the company need to sell to break even? (you must show your work for this answer to receive credit) (4 pts) $1 million/($50-$30)=$50,000 Weekly Tasks - MP Week CH 15 – Strategic Pricing Methods (8 points) 1. A phone manufacturer is determing a price for its product using a cost-based pricing strategy. The fixed costs are $100,000, and the variable costs are $50,000. If 1,000 units are produced and the company wants to have a 30 percent markup, what is the price of the phone? (show work)(4 pts) 100,000/1,000=100 50,000/1,000=50 100+50=150 150*.3=45 150+45=195 The phone costs $195. 2. As the product manager for Whirlpool’s line of washing machines, you are in charge of pricing new products. Your product team has developed a revolutionary new washing machine that relies on radically new technology and requires very little water to get clothes clean. This technology will likely be difficulty for your competition to copy. Should you adopt a skimming or a penetration pricing strategy? Justify your answer. (4 pts) Penetration pricing strategy because people are generally not trusting when it comes to change to something that was working well before. This way with the lower price going in you are able to reach a larger customer base and determine how willing consumers are to switch to the new technology.

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