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. This strategy is effective for extremely innovative products or for products being introduced to a market so that they can take advantage of customer involvement and attraction towards the product. ChurroZ are Spanish donuts and they are being introduced in New Zealand on a cart for customers on the go. As the product is being introduced in the market, the business could think about utilizing Price Skimming as a strategy because it is a relatively new product for the New Zealand market and customers would be interested in trying it. Later, they bring the prices down if the demand falls or the competition increases. Penetration Pricing – In this pricing strategy, a business sets a relatively low price to enter a market to attract maximum customers and induce trials. The objective of the strategy is to make the customers switch from their existing brands due to the lower pricing. The target is to increase market share, sales volume. This strategy is not suitable for ChurroZ as it is a new product and there is very little or no competition currently in the market. Various Price Allocation Techniques Cost plus pricing – this technique is the most commonly used and popular with manufacturers. It involved adding up all the costs associated with the manufacturing of a single item and then adding up a desired profit to find the price. This is a fairly simple and transparent technique and it involved minimum complexity. It is most suitable for business startups or if entering a new market. Competitive Pricing – Another strategy of pricing is to price your product based on the prices of the competitors. However, this strategy is a risky one as it can back fire if it induces a price competition among businesses. Hence, business should only compete with others of their own size and strength. This strategy is not suitable for startups as they would looking to stabilize themselves and understand the market and their customers and blend in accordingly. Demand Based Pricing – Demand based pricing is the method in which an analysis of consumer response to a range of prices reveals the highest acceptable price. This is a relatively new method that relies on research and time. A company before deciding on a price and launch the
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…
Branding involves the logo, the tagline, packaging, the website, and promotion materials – the message through all of these should be consistent because the brand carries a promise. Brand differentiation occurs through psychographic variables (Mitchell and Amioku, 1985).
With the reality of borderless markets, the strategy would have to be one that that works for both the local and global audience as any dissimilarities or differences there would be questioned. The kind of branding strategy that is to be created for this product will have the following as the main features: It should have a consistency in message no matter what market it is aimed it.
The CAPM model therefore relies on the ability to measure market volatility as a whole. With several possible investments available in the market, the model assumes that one can accurately assess the volatility of each of these investments. This is impossible.
Whilst some of these data may be due to data-snooping from the analytical work of armchair researchers attempting to discern some meaning to what could just be a simple collection of facts, much of the empirical data such as beta, stock volatility, co-variances, etc.
Through the use of advertisement and the ever so powerful word of mouth, the consistent theme of PS3 has created a strong brand image. Sony PS3 solid brand image has been reinforced and poses as a powerful purchase
These reasons also form part of the justification why the Blue Team Company should consider employing a versatile pricing strategy for their new product in order to maximize return on investment, increase product
The everyday low price strategy would be perceived as expected and normal and would not lure other new customers to buy since it would already be understood as given and a fact to the supermarket. By offering major price
It balanced the capacity of a good that is priced highly during greatest demand period. The marginal cost of a product remains constant up to the maximum level of production, when it remains vertical. There is an
Companies continually advance and reform their brands to gain not only competitive edge, but also brand equity.
Inventioncredit gives brands the license and latitude to utilize strategies that are against category culture
1 pages (250 words)Assignment
Get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Apply my DISCOUNT
Got a tricky question? Receive an answer from students like you!Try us!
Didn't find an essay?
Contact us via Live Chat, call us at +16312120006or send an email to email@example.com