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Key Questions

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Submitted By williams720
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1. Cost-plus pricing takes the organization’s product cost and adds a desired markup. It is used frequently because it’s the simplest cost to calculate, however it does fail to take marketing vision and market conditions into consideration.
2. Penetration pricing is a pricing strategy that uses a low price during the early stages of a product’s life cycle to gain market share. Toyota used the penetration pricing with their Prius by pricing it about $3,000 below cost to secure a leadership position in the emerging market for hybrid automobiles in the US.
3. Five ways for a small business to advertise and promote their products or services using the latest developments in communications and Internet is:
a. Set up a website and email
b. Set up social media ( Facebook, LinkedIn)
c. Go to VistaPrint or equal and get business cards, stationary, etc.
d. Volunteer to be a speaker about your business
e. Post sales letters, flyers, and other printed information in the public
4. Advantages of opening a website for your business through a service such as Yahoo! are:
a. Reaching a wider audience
b. Anyone, anywhere, anytime
c. Publicity and advertising
Some disadvantages of opening a website for your business through a service such as Yahoo! are:
d. Difficulty reaching the right customers
e. Crashes and updates
f. Bad publicity
5. Breakeven is a critical concept for any organization because it’s the point at which fixed costs are recovered by sales, but variable costs are not included and no profit has yet been made. Breakeven analysis is a good tool for examining all your costs and should be performed frequently.
6. Types of communications budget are:
a. Percentage of sales method
b. Competitive spending method
c. Excess funds approach
d. Objective and task method
Percentage of sales is the most common method and it’s the simplest to use because the

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