Marketing Pricing / Business & Finance – Marketing

Marketing Pricing / Business & Finance – Marketing

ONE SUBMISSION per NewShoes TEAM

Pricing is the most critical financial-performance component of NewShoes in its simulated markets and can have a significant impact on YOUR sales, revenues, and profitability.

2.1 BREAKEVEN ANALYSIS – Complete 1st attached worksheet (pg. 2) to determine YOUR product’s proposed Selling Price in for one (1) market region(i.e., Home, Domestic, or Foreign) for one (1) period.

2.2 RESPONSE ANALYSIS – Complete 2nd attached worksheet (pg. 3) to estimate YOUR product’s unit sales at a specific price.

2.3 PRICING STRATEGY – Explain how YOUR product’s pricing (in the market you selected in question 2.1) aligns with your overall marketing strategy. How does YOUR price support customers’ perception of YOUR product?

REQUIREMENTS

· Final written submission should NOT exceed two (2), double-spaced pages

· Use standard 8.5″ by 11″ pages, appropriate margins, and an 11- or 12-point font

· Submission must include your SECTION #, NewShoes TEAM #, and TEAM LEADER’s name

· DUE: MONDAY, NOVEMBER 06 @ 11:59 PM; submitted on CANVAS

GRADE

· 1 POINT for complete paper submitted before the DEADLINE

· Work that is incomplete or not submitted in proper form will receive a zero (0)

LATE SUBMISSION PENALTIES

· SUBTRACT 50% If submitted after DEADLINE, but BEFORE 11:59 PM on NOVEMBER 07;

· SUBTRACT 100% If submitted AFTER TUESDAY, NOVEMBER 07

MKTG 2101: NewShoes PRICING – Breakeven Analysis (page 2 of 3)

MKTG 2101 Sec (001 or 002):

TEAM #:

Leader’s Name:

MARKET REGION (Choose ONE – Home, Domestic, or Foreign):

DECISION PERIOD (Choose ONE – 1 through 6):

GENERAL FORMULA

Estimated Expenses

(Total Dollars)

Breakeven Price = —————————– + Estimated Unit Cost of Goods Sold

Estimated Sales

(# Pairs)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

WORKSHEET

Estimated Unit Cost of Goods $

(from Learning Experience curve)

Estimated Expenses (for chosen Market Region)

Advertising $

Consumer Sales Promotion $

Personal Selling $

(# salespeople x $ salary)

Dealer Sales Promotion $

Product Development $

(Pro-rated – see regional income statement)

Market Research $

(This market region ONLY)

Region Start-Up Cost $

(Total, if any)

TOTAL (Estimated Expenses) $

Estimated Sales (# Pairs)

(Forecast for chosen Market Region in Units)

BREAKEVEN PRICE (Per Pair) $

MARKUP / PROFIT? (Per Pair) $

PROPOSED SELLING PRICE (Per Pair) $

MKTG 2101: NewShoes PRICING – Response Analysis (page 3 of 3)

MKTG 2101 Sec (001 or 002):

TEAM #:

Leader’s Name:

Understanding general tendencies is helpful, but you need a clearer picture of each market’s response to price. One way to do that is to try out different prices in test markets to establish the relationship between price and demand for YOUR product. Since that is not an option, historical data can be used to predict demand at a particular price.

Here are sample data showing five periods of prices and unit sales. Plot the data from the table on the graph below, and draw a curve that estimates the consumer response to price. How many units would you expect to sell if you set YOUR price at $85?

MKTG 2101: NewShoes PRICING 11.06.2017