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Skimming and penetration pricing4/28/2024 ![]() Monopoly, in which there is only one seller of a good.Imperfect competition refers to the market structure that does not meet the conditions of perfect competition. Homogeneous Products – The characteristics of any given market good or service do not vary across suppliers.Companies aim to maximise profits - Firms aim to sell where marginal costs meet marginal revenue, where they generate the most profit.Perfect Information - Prices and quality of products are assumed to be known to all consumers and producers.Zero Entry/Exit Barriers – It is relatively easy to enter or exit as a business in a perfectly competitive market.Other characteristics of a perfectly competitivemarket include: In a perfectly competitive market, every buyer or seller is a'price taker', and no participant influences the price of the productit buys or sells. The price that a business can charge for its products or services will be determined by the market in which it operates. The amount that they are able to sell will often be determined by the price charged for the goods and services.Businesses make profits by selling goods and services at a price higher than their cost.It makes a pivotal contribution to profit maximisation – the overriding aim of most businesses.calculate, for given data, a price using a relevant cost strategy.explain, using a simple example, a relevant-cost pricing strategy.explain, using a simple example, a price-discrimination pricing strategy.identify suitable pricing strategies for given situations from skimming, penetration, complementary product, product-line, volume discounting.calculate, for given data, a price using a cost-plus strategy.explain, using a simple example, all forms of cost-plus pricing strategy.using data supplied or equations derived, advise on whether or not to increase production and sales levels considering incremental costs, incremental revenues and other factors.from supplied data, derive an equation for the total cost function excluding or including volume-based discounts.from supplied data, derive and manipulate a straight-line demand equation.define and explain the price elasticity of demand.explain the factors that influence the pricing of a product or service, e.g.Intuit accepts no responsibility for the accuracy, legality, or content on these sites.Upon completion of this chapter you will be able to: Intuit does not endorse or approve these products and services, or the opinions of these corporations or organizations or individuals. We provide third-party links as a convenience and for informational purposes only. ![]() Readers should verify statements before relying on them. does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Accordingly, the information provided should not be relied upon as a substitute for independent research. does not have any responsibility for updating or revising any information presented herein. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Applicable laws may vary by state or locality. Additional information and exceptions may apply. This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. If you make a bold offer, you better be able to back it up.A free product (even for a limited time) can be the ticket for long-term awareness and sales.There are two critical takeaways from Sunny Co Clothing’s penetration pricing stunt: Nevertheless, Sunny Co emerged from the situation with thousands of new loyal followers and an infamous legacy. But there was a problem: the sudden surge in sales forced the brand to cap the offer at 50,000 swimsuits, which caused a backlash on social media. More importantly, 346,000 orders came through. ![]() Word of mouth propelled Sunny Co’s Instagram following from 7,000 to more than a quarter-million overnight. ![]() In the summer of 2017, two students at the University of Arizona came up with an idea to get attention for their swimwear line, Sunny Co Clothing, in a saturated marketplace: anybody who posted a picture of their classic red swimsuit (valued at $64.99) on Instagram would get a free one-just pay shipping. Clothing: The pros and cons of a viral swimsuit giveaway
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