Marketing
14th Edition
ISBN: 9781259924040
Author: Roger A. Kerin, Steven W. Hartley
Publisher: McGraw-Hill Education
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Chapter 14, Problem 6AMK
Summary Introduction
To determine: The sellers to the wholesalers and the gasoline stations. The sales price by the manufacturer
Introduction:
The method that is adopted by the firm to fix the selling price is known as pricing. The pricing generally depends on the average cost and the perceived value of the product.
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A manufacturer of motor oil has a trade discount policy whereby the manufacturer’s suggested retail price is $30 per case with the terms of 40/20/10. The manufacturer sells its products through jobbers, who sell to wholesalers, who sell to gasoline stations. What will the manufacturer’s sale price be?
If an item is particularly valuable to a customer, using customer-based pricing might suggest a price that is higher than the one that would be indicated by use of a standard markup. Describe a situation where the use of customer-based pricing would suggest a price that is lower than the one that would be indicated by use of a standard markup.
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?
Chapter 14 Solutions
Marketing
Ch. 14.1 - Prob. 14.1LOCh. 14.1 - Prob. 14.1LRCh. 14.1 - Prob. 14.2LRCh. 14.1 - Prob. 14.3LRCh. 14.1 - Prob. 14.4LRCh. 14.1 - Prob. 14.5LRCh. 14.2 - Prob. 14.2LOCh. 14.3 - Prob. 14.3LOCh. 14.4 - Prob. 14.4LOCh. 14.4 - Prob. 14.6LR
Ch. 14.4 - Prob. 14.7LRCh. 14.4 - Prob. 14.8LRCh. 14 - Prob. 1AMKCh. 14 - Prob. 2AMKCh. 14 - Prob. 3AMKCh. 14 - The Hesper Corporation is a leading manufacturer...Ch. 14 - Prob. 5AMKCh. 14 - Prob. 6AMKCh. 14 - Prob. 7AMKCh. 14 - Prob. 8AMKCh. 14 - Prob. 1VCCh. 14 - Prob. 2VCCh. 14 - Prob. 3VCCh. 14 - Prob. 4VCCh. 14 - Prob. 5VC
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- a manufacturer produces a crib at a cost of $120 and adds a markup of 65% of the cost to determine the net price at which the crib will be sold. If he wishes to allow a 20% trade discount for his best customers, what list price should he set for the crib?arrow_forwardThe markup on a new diamond ring should be 25% based on selling price. If the seller paid $4,325.00 for one, then how much should it be sold for to achieve the desired markup?arrow_forwardConsider the advertisement for a gutter cleaning service shown below. What is the external reference price in this ad? According to the course material, an advertisement could attempt to frame a price as a single loss, as two losses, as a gain and a loss, or as a gain foregone. Which one of those framings is this advertisement attempting to accomplish? Explain your reasoning. If your internal reference price for gutter cleaning service was $125, how would you perceive this advertised price of the company’s gutter cleaning service? Would you perceive it as a single loss, as two losses, as a gain and a loss, or as a gain foregone? Explain your reasoning.arrow_forward
- Mr. Robert took a bag of chips from a super market and noticed to a coupon attached to the bag of the chips allowing him to get 20% off on the purchase price This is an example ofarrow_forwardA consumer purchases a coffee maker from a retailer for $90. The retailer’s markup is 30%, and the wholesaler’s markup is 10%, both based on selling price. For what price does the manufacturer sell the product to the wholesaler?arrow_forwardFor 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?arrow_forward
- A firm wants to stop its sales agents from pricing too aggressively to make sales by requiring the agent to obtain a marketing manager’s permission to reduce price below a specific threshold. This solution would only work if a) The marketing manager has no information about the matter at hand b) The marketing manager can only get all the information on the case from the sales agent c) Enough unbiased information is transferred to the manager to prevent an unprofitable price reduction d) All of the above Please clearly explain your answerarrow_forward1. At a local Bed and Bath Superstore, the manager knows her customers will pay no more than $390 for a bedspread. The company wants a 40% markup on selling price. What is the most that the company can pay for a bedspread to realize the required markup?arrow_forwardA bait‐price item has a particularly low price and is widely advertised. Whencoming to buy the item, consumers are encouraged to buy a far more expensive item. Why are bait‐prices considered to be unethical?arrow_forward
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