You are an owner of a small independent chain of coffee houses competing head-to- head with Costa Coffee. The retail price your customers pay for coffee is exactly the same as at Costa Coffee. The wholesale price you pay for roasted coffee beans has increased by 25 per cent. You know that you cannot absorb this increase and that you must pass it on to your However, you are concerned about the consequences of an open price increase. Discuss three alternative price-increase strategies that address these concerns.

You are an owner of a small independent chain of coffee houses competing head-to- head with Costa Coffee. The retail price your customers pay for coffee is exactly the same as at Costa Coffee. The wholesale price you pay for roasted coffee beans has increased by 25 per cent. You know that you cannot absorb this increase and that you must pass it on to your However, you are concerned about the consequences of an open price increase. Discuss three alternative price-increase strategies that address these concerns.

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter20: Setting Prices

Section: Chapter Questions

Problem 1DYMP

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You are an owner of a small independent chain of coffee houses competing head-to-head with Costa Coffee. The retail price your customers pay for coffee is exactly the same as at Costa Coffee. The wholesale price you pay for roasted coffee beans has increased by 25%. You understand that you cannot absorb this increase and that it must be passed on to your customers. However, you are concerned about the consequences of an open price increase. Discuss three alternative price increase strategies that address your concerns.
For this discussion, use the following hypothetical scenario as the basis for your response: Your business partner is strongly opposed to your proposal to charge your largest customers lower prices for your web-based services than what you will charge your smaller customers. She is arguing it is unethical, unfair, and possibly illegal. Address the following in your discussion post: Make a case that both groups of customers will be satisfied with the deal and that this is a perfectly legal form of pricing in a business-to-customer relationship. What degree is this type of price discrimination? How will the plan increase revenue? Why will both groups of customers be satisfied with the deal? Why is this a legal form of pricing?
Many successful retailers use a loss leader pricing strategy, in which they advertise an item at a price below their cost and sell the item at that price to get customers into their store. They feel that these customers will continue to shop with their store and that they will make a profit in the long run. Do you consider this an unethical practice? Who benefits and who is hurt by such practices? Do you think the practices should be made illegal, as some states have done? How is this different from bait-and-switch pricing?
Suppose you have been asked by a food company to design an experiment that examines consumers’ purchase intentions toward their product (i.e., cereals), as a result of their recent pricing strategies (i.e., low price, high price) and product quality (i.e., organic offerings, nonorganic offerings) strategies. Basically, they would like to know the best combination of product quality offering and pricing strategy that yields the highest levels of consumers’ purchase intentions. How would this experiment look like? When working on this assignment, you should consider the following: Subjects: The experiment participants should be customers who consume significant breakfast cereals and are diverse in terms of income group, age group and work type. Experimental conditions: Independent variables – quality (categorical), price Dependent variable – Propensity to pay Effects: The main effect shall be impact of independent variables on propensity to pay such as how much affect does quality or…
Suppose a manufacturer of exercise equipment sets a suggested price to the consumer of $395 for a particular piece of equipment to be competitive with similar equipment. The manufacturer sells its equipment to a sporting goods wholesaler who receives 25 percent of the selling price and a retailer who receives 50 percent of the selling price. What demand-oriented pricing approach is being used, and at what price will the manufacturer sell the equipment to the wholesaler?
Think about the last time you went to a shop, and consider how many different products there were to choose from, all of which have different prices Explain how pricing affects you as a consumer. Include the following details: An example of a time when you were faced with two identical or similar options and chose the cheaper option and explain why; If there are any products or services you feel you cannot compromise on price for, and why or why not; and How pricing affects your satisfaction with a product or service.
What might make it difficult to determine the prices of one’s competitors? When such difficulties occur, what could be done to surmount them?
Innovative Service Pricing Explore one highly successful business model based on innovation service pricing and/or revenue management strategies, and choose another, one, business model that failed because of major pricing or revenue management strategy issues. What lessons can you learn from your analysis of these successful and unsuccessful pricing and revenue management strategies? Also, the report should shed light on the negative/positive impact of the covid-19 pandemic on the two models reported. Your report must develop a list of recommendations and advice for the chosen models to boost its service marketing activities in the market and enhance its competitiveness. The report should consist of (1,500 words, "Times-New-Roman", 12 pnt. size, 1.5 line spacing).
The cost of doing business and establishing retail pricing are directly related to a business’s bottom line. Therefore, if there is a change in the cost of goods, it will affect the profitability of a business that has set prices for its products. 1. How might profitability and market share be affected if retail pricing fluctuates depending on the cost of raw materials? 2.Why do you believe that to be the case? 3. Why is it important that a company’s pricing objectives fit well with its marketing objectives? Please number your response for each question (1, 2, and 3).
The cost of doing business and establishing retail pricing are directly related to a business's bottom line. Therefore, if there is a change in the cost of goods, it will affect the profitability of a business that has set prices for its products. 1. How might profitability and market share be affected if retail pricing fluctuates depending on the cost of raw materials? 2. Why do you believe that to be the case? 3. Why is it important that a company's pricing objectives fit well with its marketing objectives? Please number your response for each question (1, 2, and 3).
Can a producer of a popular low-cost or budget items effectively penetrate the high-end market? Give an example of a popular low-cost brand. What will it take for this to successfully move toward the high-end market? Conversely, identify a well-known premium-only brand. Identify the price point at which its products sell. Assume that you are to offer new mid-priced products under this brand. What will it take to successfully move this brand toward the mid-point of the market?
Discuss the relationship of price to value. Does a low price necessarily mean a better value? Give an example to illustrate your opinion. How can a firm offer good value in a mature market where price seems to be the only visible means of differentiation?