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Pricing Strategy: ChurroZ - Assignment Example
Pages 4 (1004 words)
Pricing Strategy ChurroZ Type your name here Type your University name here 5/22/2012 Pricing The product is meant for an average and high end customer of the market. Moreover, since the ingredients used are expensive, the ChurroZ cannot be priced at the same level as others, otherwise the notion of a high quality tasty product wouldn’t be displayed…
Cost includes the cost of goods manufactured, which includes raw materials, processing, labor, etc. and the cost of goods sold that includes the operating expenses. The operating expenses and initial investment would be covered under the assigned budget. Mostly, businesses that are entering into a market try to set a price that covers their cost while helping them earn a reasonable amount of profit. Hence, the pricing methodology is pretty simple, they add a markup to the total cost of the product. There are several pricing options available based on which we can decide the price of an item of ChurroZ Pricing Strategies A product can be priced according to several strategies. A business should decide on a pricing strategy based on its marketing strategy, as well as the market it is moving into. We are discussing the following two pricing strategies here: Price Skimming – Using this strategy, a business charges a relatively high price for a short period of time exploiting newness of the product. The main target of the strategy is to ‘skim off’ customers who are willing to pay a high price for getting the product sooner. The prices are reduced as the demand goes down. ...
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