Pricing Concepts

Kerrie Juneau
Pricing Concepts

Questions #1-3
As can be seen by the calculations on the attached excel spreadsheet, when the consumer toll of an item is reduced, retentiveness all told other values constant, the retailers cost, the wholesalers cost and the manufacturers value are also reduced by the same percentage. The price was reduced by 6.25% and so were the other values. Also, when fixed and variable cost increase, keeping all other values constant, more units must be sold to break-even or to make a profit. The fixed costs were increase by 15%, the variable costs were increased by 5% and the number of units to be sold increased by a total of 20% reflecting the total channelize in cost. When all of these changes occur together, the manufacturers price is swallow and more units must be sold.

Question #4
caravan Westendorps Price Sensitivity Meter sounds like a very useful alsol in determining prices to direct for wares and services. 4 questions are asked to consumers:
1. At what price would you consider the harvest-feast too costly?
2. At what price would you consider the product to be so cheesy you would not consider it?
3. At what price would you consider the product to start to get expensive?
4.



At what price would you consider the product to be a good value or bargain?
The answers to these questions are plan on a graph on which the percentage of respondents lies on the vertical axis and the prices on the horizontal axis. The point at which the too cheap and expensive lines intersect is the PMC or lower limit of the price range. The PME is where the too expensive and inexpensive lines intersect. This is the hurrying limit of the price range. Where the inexpensive and the expensive lines cross is the IPP where consumers echo the product or service is cheap or expensive. Where too cheap and too expensive intersect is the OPP or the price at which the price sensitivity for being too cheap is equal to the price sensitivity for...If you want to get a full essay, order it on our website: Ordercustompaper.com



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