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    Dr Afua
  • Course

    BUS626
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  • Subject

    Business
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Question

  1. For these 5 pricing concepts, locate and study each of the pricing concepts in your text book before responding to these prompts.   Clearly and briefly itemize and discuss the methods to set product prices in the marketplace and suggest products to which the various price setting methods might apply. Provide one clear example that exemplifies the various product pricing methods and suggest why each would be applicable.
  2. Itemize and discuss types of differentiated/discrimination product pricing techniques (legal price discrimination) and provide a clear product example of the use of differentiated product pricing techniques.
  3. Itemize and discuss the issue of price cuts and the advantages and disadvantages of price cutting traps. Provide one clear, specific example of a price cutting situation and its result.
  4. Itemize and discuss promotional pricing techniques by discussing the various advantages and disadvantages of employing various promotional pricing techniques in particular market situations. Provide one clear example of the use of a promotional pricing technique with a particular product.
  5. Itemize and discuss the issue of price discounts by discussing the various advantages and disadvantages of employing various price discounts and allowances in particular market situations. Provide one clear example of the use of a price discount pertaining to a particular product.
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The methods to set product prices are (1) markup pricing, (2) target-return pricing, (3) perceived-value pricing, (4) value pricing, (5) EDLP, (6) going-rate pricing, and (7) auction-type pricing.

1. Markup Pricing is a where a markup is added to the product’s cost. The idea is that the markup will generate profit. Markup pricing is dominant in the retail industry with companies such as Walmart and Target (Wang, Lau, & Lau, 2013).

2. Target-Return Pricing is where the price is set at a certain rate that will yield a desired rate of return on the investment. Studies have shown that there are four major objectives associated with target-return pricing: (1) the achievement of satisfactory profits and sales, (2) the service quality related objectives, (3) the financial objectives, and (4) the stability in the market (Avlonitis, & Indounas, 2005). Target-Return pricing can be found in the banking industry with banks such as Wells Fargo and Bank of America (Avlonitis, & Indounas, 2005).

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