...Project Part 4 11/13/2012 “Consumers Change Their Behavior in Response to the Gas Prices” The article starts by talking about how higher gas prices and higher tolls ultimately did what Mayor Bloomberg’s ambitious congestion pricing was supposed to do. When gas prices climbed to more than 4 dollars per gallon, traffic on bridges and tunnels dropped 4.7 percent compared with the previous years. While at the same time, subway, bus and commuter train riders increased by 6.5 percent. From Manhattan to New Jersey there was a 9 percent increase of people taking the train. That goes to show you that pricing does matter and people do respond to it. And do to the higher gas prices and people driving less tolls took a major hit 4 million below budget. The fact that the price elasticity of demand for a product such as gas will be larger the longer the period of time involved. It takes buyers time to adjust their routines as a result of a change in price. Consumers began to explore alternatives to driving when gas rose over 4 dollars a gallon. So if high gas prices persist consumers will make adjustments, such as driving less and taking public transportation more. Those demand for gasoline will become the more elastic. There for demand becomes more elastic other longer period of time and the quantity of gas demanded will decline further. Thinking Critically 1. I don’t 100% agree with Joe, yes sure initially you’ll make up the loss in quantity sold with the higher price. But if...
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...Resellers Benefits of Becoming a Reseller Reselling new products to an existing customer base is a quick and easy way to grow your business and maximise the revenue potential for each existing customer. Adding new products or services to your business can help you win new customers and expand into new territories. An expanding business portfolio increases value benefits for all customers and increases customer satisfaction experienced, encouraging repeat sales and loyalty. If you are considering starting a business can you become a reseller of a product or products that have already been researched and developed significantly reducing your capital outlay and risk. If you are a small business or are starting out in business you can resell products for larger companies that have the resources to support and maintain them after the point of sale enabling you to increase your revenues without increasing your ongoing work load. The ability to resell products or services online with out the need for stock or premises means makes it possible to start as business as a reseller from home with virtually no risk or investment. By finding merchants on The Reseller Network you may be able to resell for international companies at better rates enabling you to maximise your revenue. The cost of marketing to generate product and brand awareness is reduced by the collaboration of reseller partnerships promoting the same products or services. How to become a reseller Register as a reseller with...
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...really enjoy the driving experience Successful businessman and governor who usually lie in better neighborhoods Trucks and Buses SCANIA, MAN Target: big enterprise and government Public transportation group Financial Services: Target: conservative people who paying closer to the total cost of mobility People who decide just to use a car not buy one The car buyers who need financing and insurance Price Volkswagen has consistently acted with a premium pricing strategy. Their products typically have a high price, on average 10 percent higher than competitors (reference: consumer report by Volkswagen, 2012); however, the return is more upscale driving and ownership experience. In recent years, their pricing strategy has decreased to only 5 percent higher (reference: the interview with the PR president). This decrease in price was due in fact to the belief among consumers that Volkswagen passenger cars are too expensive for the quality delivered. Their premium pricing strategy has caused them to lose some market share to competitor brands. This was not a substantial problem in the past,...
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...1. One factor influencing Divine Chocolate Ltd’s pricing decisions is the fact Kuapa Kokoo owns 45% of Divine Chocolate Ltd and influences the company’s decisions and receives a share in the profit. This means that the company will have to think about what price to make the chocolate bar in order to still receive a good amount of profit after Kuapa Kokoo takes their share of it. If they don’t consider this, they make not make much profit, if any at all, and their business will be unsuccessful leading to loss of sales and no profit. A second factor affecting their pricing decisions is the competition they have with Cadbury’s. Cadbury’s bars of chocolate cost 82p and Divine Chocolate Ltd’s chocolate bars are 81p. They have to consider their pricing because Cadbury’s is a well known brand which is very popular so if they had their chocolate bar more expensive than Cadbury’s then customers are more than likely going to purchase the Cadbury’s bar because not only is it more popular but it is cheaper too. So in order for Divine Chocolate Ltd to do well, they have to make sure they are cheaper than their competitors. 2. A rivalry of two or more businesses that target the same customers. Business competition tends to result in increased efficiency as firms attempt to reduce expenses. One advantage to show that Divine Chocolate Ltd has become more competitive is the cheaper prices they offer. If customers see a chocolate bar, that would probably taste the same as a Cadbury’s bar, cheaper...
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...Game Theory Application on Pricing Strategies Used by the Retail Supermarket Industry Everyday low pricing (EDLP) and High-Low Pricing are the most popular pricing strategies used by companies in the retail supermarket industry. In this part of the project, the two pricing strategies are analyzed using a game-theoretic framework and compared to the observed behavior of supermarket within the industry. First, the definitions of both strategies are provided to better understand the analysis. Everyday low pricing (EDLP) is a pricing strategy that provides consumers with low prices without the need of using of coupons or waiting for sales price events. This strategy was started by Wal-Mart and Procter & Gamble and it is believed that EDLP saves retailers the time and expense of applying short-term promotional pricing, as well as, the cost of distributing and processing of coupons. Companies who often adopted this strategy also believed that it creates shopper loyalty. (Barron's Educational Series, Inc., 2000) The basic premises that suppliers are basing on when using EDLP are the following: * Steady, competitive prices will lead to even demand for products. * Inventory and other logistical costs will drop due to effective management of product flows. * There will be reduction of promotional costs and other forms of trade. * The costs of saving due to consistent demand and better management of inventory will result to lower final price of the products. (Hurwich...
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...review chapters 11-21 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. A new-product strategy: a. | links the new-product development process with the objectives of the marketing department, the business unit, and the corporation | b. | is part of an organization's overall marketing strategy | c. | specifies the roles new products play in the organization's overall plans | d. | describes the characteristics of products the organization wants to offer and the markets it wants to serve | e. | is accurately described by all of these | ____ 2. The first stage of the new-product development process is: a. | screening and concept testing | b. | establishing the new-product strategy | c. | exploring opportunities | d. | developing a business analysis | e. | the building of a prototype | ____ 3. A manufacturer of office furnishings is finding it difficult to compete with cheaper imported merchandise. Which of the following is a potential source of new-product ideas that would allow it to compete more effectively? a. | current retailers who carry the manufacturer's equipment | b. | its foreign competitors | c. | the company's employees | d. | customers who have requested its catalogs | e. | all of these | ____ 4. Which of the following stages of the new-product development process is the first filter in the new-product development process and serves to eliminate new-product ideas...
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...demand for the product is always high. The company under evaluation is Apple Inc and the product they recently introduced into the market the IPhone. Focus will be on the strategies the company uses to make the demand curve steeper when the prices are high. The company is well established in the global market and has a high local following. The company announced the iPhone in July 2009 and it has a price tag of 599. This price discrimination strategy was aimed at ensuring that the product is associated with prestige and attracts the upper end of the market. After record high sales began to drop, the company reduced the cost of the devices to maintain the high profits. The company was able to derive high profits from low pricing strategy that the high pricing strategy. Apple had introduced a new piece of technology that had not been available in the market. The period between the July and September saw the company enjoy a period of no competition as the product was unique in the market. Company which had focused on computers and entertainment gadgets had ventured in to the communication industry to diversify its sales (Swaim 96). A niche strategy was used by apple to increase it profits during the launch of the iPhone. This strategy is utilized by the organizations that can not afford to use wide scope cost leadership...
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...Pricing strategies of low cost airlines Keith J Mason Air Transport Group Cranfield University K.Mason@Cranfield.ac.uk 1. Introduction Low cost airlines such as EasyJet, and Ryanair have developed quickly in the European market in the last five years. The UK market has seen the most dramatic development where by the summer of 2001, these carriers accounted for over 22% of the short haul capacity from London and were present in 58% of the 128 short haul routes operated from this city (source: OAG, 2001). During a five-year period from 1997, the seat capacity offered from London has risen by 17%, and virtually all of this rise (95.4%) was attributable to the low cost carriers. The low cost carriers have both penetrated and grown these markets, principally by garnering a consumer perception that the fares offered are very low. This perception has been developed in no small part by extensive advertising and effective use of public relations. For example, Ryanair has offered fares as low as one penny (plus taxes), and therefore it is not surprising that there is great media coverage of these carriers, which in turn generates more interest in the services. Both Ryanair and EasyJet have been very effective in using media coverage of their legal wrangles with traditional carriers such as British Airways and Lufthansa to promote their services and low fares. While the media has helped these airlines communicate their message of low fares to the public...
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...decisions a firm has to make relates to pricing its products or services. If consumers or organizational buyers perceive a price to be too high, they may purchase competitive brands or substitute products, leading to a loss of sales and profits for the firm. If the price is too low, sales might increase, but profitability may suffer. Thus, pricing decisions must be given careful consideration when a firm is introducing a new product or planning a short or long- term price change. Price and Pricing defined Price is the money, good or service exchanged for the ownership or use of a good or service. Examples of various names of price are tuition for education, rent for use of asset, interest for use of money and fare for use of taxi or a bus ride. Pricing may be defined as those activities involved in the determination of the price at which products that will be offered for sale considering the various objectives of the firm. Demand Influences on Pricing Decisions Demand influences on pricing decisions concern primarily the nature of the target market and expected reactions of consumers to a given price or change in price. Three primary considerations are demographic factors, psychological factors and price elasticity. 1. Demographic Factors In the initial selection of the target market that a firm intends to serve, a number of demographic factors are usually considered. Demographic factors that are particularly important for pricing decisions include the following: ...
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...Chestnut pricing Having completed a market assessment study and also a risk assessment study the Management of Chestnut Ridge wanted to take a relook at the pricing strategy of the country club. The annual fees due to the country club from existing members currently stood at $2000 per annum. The Management wanted to carry out a consumer based pricing analysis from potential customers so as to check if they needed to charge a different pricing level from new applicants. Proposed consumer based pricing approach. The price scale, which Chestnut Ridge wanted to use had three basic elements : (1) Beginning price level (2) Price interval, and (3) Ending price The price scale : ------------------------------------------------- $.1500 ------------------------------------------------- $.1750 ------------------------------------------------- $.2000 ------------------------------------------------- $.2250 ------------------------------------------------- $.2500 ------------------------------------------------- $.2750 ------------------------------------------------- $.3000 ------------------------------------------------- $.3250 ------------------------------------------------- $.3500 ------------------------------------------------- $.3750 ------------------------------------------------- $.4000 ------------------------------------------------- $.4250 ------------------------------------------------- $.4500 The Management assigned two researchers...
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...307 Study Guide Terms 1. Convenience Products: those for which the consumer is not willing to spend any effort to evaluate prior to purchasing. 2. Shopping Products: those for which the consumer will spend time considering alternatives, such as apparel, fragrances, and appliances. 3. Specialty Products: products/services that the customer shows a strong preference and for which he or she will spend considerable time searching for the best supplier 4. Voice of Consumer (VOC) Program: an ongoing market research system that collects customer inputs and integrates them into managerial decisions 5. Zone of Tolerance: the area between customers’ expectations regarding their desired service and the minimum level of acceptable service--- that is, the difference between what the customer really wants and what he or she will accept before going elsewhere. 6. House Brands: (Private-label brands) brands developed and marketed by a retailer and available only from that retailer 7. Store Brands: Same as House Brands. 8. Family Brand: A firm’s own corporate name used to brand its product lines and products. 9. Brand Licensing: A contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characteristics in exchange for a negotiated fee. 10. AIDA model: A common model of the series of mental stages through which consumers move as a result of marketing communications: Awareness leads to Interests, which...
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...are problematic like: * Maximizing ticket revenue without charging high price for it. * Peoples’ willingness to pay for specific event * Appeal of the sport (global and local) * Stage events (opening and closing ceremonies) * Particular team or athlete * Limited guidance for pricing tickets from past events. * Every city’s taste and preferences matter * Reach of the games by location * Internet ticketing * Recent global financial crisis * Maximizing attendance by selling to the right person and ensuring their presence. * Generating genuine enthusiasm is important * No empty arenas and stadia * Knowledgeable spectators * Selling ticket for the infamous sports in preliminary rounds like table tennis, archery, handball, etc. * Price differentiation among each sport. * Promoting every sport * Delicate issue * Secondary market for tickets. 2. The dilemma of Williamson – explain the stances and support one of them Paul Williamson, head of ticketing for 2012 Olympic Games, he and his team is facing the dilemma while developing policies for pricing and distribution of tickets for the games. The following are the options available to them: I. It is mentioned in case that due to the importance of ticketing for the games they have strong incentives to maximize revenue from this source. It contributes around $650 million to the revenue. This is very important...
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...Discuss the main factors affecting product pricing in the UK (1000 words) Two surveys on the price-setting behaviour of UK firms published by the Bank of England in 1996 and 2008 concluded that the price, the amount of money expected, required or given for a certain level of output, was most often set as a result of market conditions. The same report however found that the second largest price differential was the objective of the specific firm surveyed, and thus product pricing in the UK can be seen to be determined primarily by the objectives of its firms, which are bounded by the differing market structures under which they operate. In the UK these dominant structures are monopolistic, oligopolistic and perfectly competitive, within which there are differing degrees of price setting ability and inter-firm competition, both of which influence the individual objectives the firms choose to pursue. As witnessed in recent years with the impact of the global recession however, all markets are vulnerable to external shocks to their product pricing. The classical theory of the firm assumes that they will pursue the objective of profit maximisation. As Milton Friedman put it in his 1970 article, ‘‘There is one and only one social responsibility of business - to use its resources in activities designed to increase its profits so long as it... engages in open and free competition without deception or fraud’1. Within a profit-maximising objective, the price charged will still be...
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...BARISTA LAVAZZA Corporate Profile Background, Market Entry & Growth: Barista coffee was established in 2000 with the aim of identifying growth opportunities in the coffee business. Increasing disposable incomes and global trends in coffee indicate immense growth potential in one particular segment. More significantly, they believe they have been quick to spot a latent need waiting to be trapped: Coffee lovers seek a complete experience. Aim was to combine intelligent positioning with the right product mix and carefully designed cafés. In other words, customers seek an “experiential lifestyle brand”. The Barista Café Logo A 34.3% equity stake was sold to Tata Coffee in 2001. C Sivasankaran bought the remaining 65 per cent in Barista from the Amit Judge-controlled Turner Morrison in 2004, and his Sterling Group also bought out Tata Coffee's stake later. In 2007, the Sterling Group sold Barista to Lavazza. Barista Lavazza is currently owned by Lavazza. The coffee is supplied by the Indian roaster Fresh and Honest, headquartered in Chennai, which is also owned by Lavazza. As of 2009, the chain has 200 stores in India, with an estimated annual revenue of 200 crores. As of today, Barista exists in over 22 cities, and operates over 140 outlets nationally. In the last 2 years, Barista has opened over 100 outlets in the country and with a new outlet opening nationally every 14 dates, Barista is currently experiencing phenomenal growth...
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...1. Everyone’s Gasoline Problems - In today’s economy the price of gas has sky rocketed due to America’s decision to be less dependent on foreign oil due to the recent discovery of many oil reserves here on our soil. In recent years the gas prices in my area have been declining; however, we have experienced several periods of a steady range of prices meaning they don’t go higher than a certain price while never dropping below another price as well. After doing some research about my areas gas prices I found a chart that shows prices from as far back as 9 years. In our textbook it list out factors that have an effect on supply and demand. In relation to gas prices I think the biggest factor is “the number of buyers”(Stone 1), which is always increasing with each passing year because with a new year comes a new generation of eligible drivers. I think a factor that also plays a big role is “Price of Related Goods” (Stone 1). Although there aren’t any comparable goods to gasoline there are substitutes you purchase or other options of transportation. With an increase in hybrid vehicles they are becoming a substitute for gas powered vehicles while also proving to be friendlier to the environment. I believe this increase of alternative modes of transportation has kept gas prices down because oil companies know that consumers are beginning to take notice to hybrids and their ability to save money while maintaining a level of comfort and style expected by today’s consumers. *Figure...
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