Marketing Task

Product, Place, Promotion and Price.

Product – what the good they are selling is. Quality, design, benefits.

Place – location of where it is sold (even into detail of where is located in store)

Promotion – discounts, advertising (billboards, TV, coupons)

Price – the price of what they are selling relative to competition or brand they are trying to build (affordable or elite). Also depends on overhead costs

1. Skim pricing is when the price is set high and then slowly lowers. Penetration pricing is when the product is listed at a low price and generally does not change.

2. It depends. Lowering the price of the product can attract more demand therefore slightly increasing profits however there is also a possibility of lowering profits since the increased demand cannot sustain the large production costs or other expenses of the business. Business’ try to find the optimal place where demand is at the highest and price is at the highest. It is essentially the highest number of people will pay for the highest possible price.

4. gross is 10,000, net profit is 7500.

5. Gross is 50,000, net is 25,000. Decision B is a better strategy in terms of profit. Also, the price per video game is half of that of the strategy A so it would have more demand therefore less risky of a business. It strategy A and B were two competing business’, B would easily win because the price per video game is much lower.

6. Often time business’ use the 4 p’s of marketing in their product. The pricing part of the 4 p’s can help you decide if a good is worth less than the price it is listed at. The promotions can also tell a consumer that business are not doing well and need to sell more of a product. This means they are more likely to offer an even greater incentive to buy their product. Knowing that some business’ keep their product at a high price to have an elite like brand is important because it can tell you value for money. Often times, high prices goods are better quality than most but their value for money is the same as the lower quality goods.

7. The price of a product will usually drop over time because it becomes devalued. This is largely because of a lack of interest in the product, the competition introducing a better product or the good becoming obsolete.

8. I would tell them that their goal is to find the peak where consumers will pay the most for a good at the highest demand.

10. The airline for the obese would have slightly wider seats than others and would therefore be around 10% higher than other airline seats. I would include unlimited, free, food on board. The food I would choose would be low costing.

11. The golf course with 5 holes would be a third the price of an 18-hole course. This makes it a relatively good deal. The membership price to number of holes ratio is similar. It would give people who can’t afford to golf at an 18-hole course be able to golf at a 5 hole course.

12. The fruit flavored chips would be at a slightly lower price than the other brands and they would be healthier. This would give people an incentive to buy a healthier good as it is at a lower price.

13. The men’s handbag should be average to low priced because there is not much demand for it. However, if they wanted an elite brand of handbags they could price it very high since there isn’t much competition.