The remaining questions relate to the described scenario below. Please read the scenario carefully and answer the following questions: After an in-depth market analysis, Brand Z identifies that the objective value of their ready-to-launch product is equivalent to $80. Based on this assessment the company plans to set the product’s retail price at $79.99. But after a quick focus group, the company realizes that the consumers do not fully recognize or appreciate the product’s true worth, and report a willingness to pay $60 (max.) for the product. 9. If the company holds a value-based approach to pricing, what would they do about the identified discrepancy between objective value and perceived value (answer in one sentence)? 10. If the company holds a demand-based approach to pricing, what would they do about the identified discrepancy between objective value and perceived value? 11. If the cost of goods sold of the product is $45 and the company intends to sell via indirect distribution (retail margins: 25% on selling price), what is the product’s contribution margin if they set the retail price at $79.99? (Please show your work in the answer box) 12. Identify one thing that the company can do to increase the contribution margin.
The remaining questions relate to the described scenario below. Please read the scenario carefully and answer the following questions:
After an in-depth market analysis, Brand Z identifies that the objective value of their ready-to-launch product is equivalent to $80. Based on this assessment the company plans to set the product’s retail price at $79.99. But after a quick focus group, the company realizes that the consumers do not fully recognize or appreciate the product’s true worth, and report a willingness to pay $60 (max.) for the product.
9. If the company holds a value-based approach to pricing, what would they do about the identified discrepancy between objective value and perceived value (answer in one sentence)?
10. If the company holds a demand-based approach to pricing, what would they do about the identified discrepancy between objective value and perceived value?
11. If the cost of goods sold of the product is $45 and the company intends to sell via indirect distribution (retail margins: 25% on selling price), what is the product’s contribution margin if they set the retail price at $79.99? (Please show your work in the answer box)
12. Identify one thing that the company can do to increase the contribution margin.
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