Posted: December 5th, 2022

Part 1(A) Should be 200-400 words. Use references that are websites and based in

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Part 1(A) Should be 200-400 words. Use references that are websites and based in the United States with in text citation. This is a discussion response.
Regardless of the investment in manufacturing a product, the pricing strategy can impact a successful launch and long-term sustainability. As noted by Peter and Donnelly (2019, p.174), setting prices at extremely high or low ends can lead to a loss of sales to competitors and lower profits. Shen and Ahmad (2022) denote that product pricing or quality is not the only consideration in purchasing decisions but also the brand image. The company’s brand or trademark highlights the product’s uniqueness and what sets it apart from its competitors (Peter & Donnelly, 2019, p. 91). Customers drinking Sam’s Wicked Seltzer for the first time would need more time and information on the product. Thus, they would rely on the brand information and trustworthy characteristic to evaluate whether the set price is worth it (Shen & Ahmad, 2022).
SWS is under a multibranding strategy by allowing the Boston Beer Company (BBC) to enter a new product class in the hard seltzer market targeting Millennials and Gen Z consumers (Peter & Donnelly, 2019, p. 94). The loyalty to the BBC’s other brands, such as Samuel Adams beer line, shares, to an extent, with this new product that does not diverge from existing products. SWS is designed to be something other than a highly exclusive product, as it looks to a target market that enjoys socializing. Like competitors, such as White Claw (WC), it is designed to be an in-between quality and value.
SWS is a new product in a highly competitive market. The high competition and struggle for portions of this market will require enticing strategies to lure the target market. Given the life cycle of SWS, penetrating pricing is the ideal strategy to introduce the product and influence a swift grip on the market share (Peter & Donnelly, 2019, p. 179). This strategy is ideal for millennials since they generally try new things, especially if they believe they are of good quality and value.
One of SWS’s significant competitors is WC. This product retails at $8.50 to $11.50 for a six-pack. To maintain the targeted segmentation and brand image, SWS pricing will be similar to WC. The ample price range will allow for high/low, directing the higher end to enthusiasm from the customer section willing to pay the higher price (Peter & Donnelly, 2019, p. 178). For example, a customer may be willing to pay a higher price if the product is offered in a secluded area with limited inventory and options for high-quality drinks. Similarly, a sales promotion of the same product, reducing cost, would entice and excite the same customer to buy more while the sale is available. This price range option will also decrease any perception of illegal pricing discrimination since the price range attempts to encounter WC’s offering (Federal Trade Commission).
References
Federal Trade Commission. (n.d.). Price Discrimination: Robinson-Patman Violations. Retrieved on November 30, 2022 from https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/price-discrimination-robinson-patman-violations
Peter, J. P. & Donnelly Jr., J, H. (2019). A preface to marketing management (15th ed.). McGraw-Hill Education, New York, NY. 9781260151619
Shen, Y., & Ahmad, R. (2022, March 1). The influence of brand image and favorability toward citizens in a product’s country of origin on product evaluation: Moderating effects of switching costs. Frontiers in psychology. Retrieved December 1, 2022, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8921870/
Part 1(B) Should be 100-200 words. Use references that are websites and based in the United States with in text citation. This is a discussion response. Eric, should penetration pricing be used when you have a competitive advantage that is differentiation? Thanks. Have a great day.
Part 1(C) Should be 200-400 words. Use references that are websites and based in the United States with in text citation. This is a discussion response. n the process of introducing a new product, companies need to be considerate of pricing decisions. There are three things that they must consider including demographic factors, psychological factors and elasticity (Paul P., 2018). As part of the demographic factors, we can consider number of potential buyers, their location, their position, the expected consumption rates of the potential buyers and their economic strength. These different factors may help determine the expected sales at different price levels (Paul P., 2018). Secondly, the psychological factors consist of how the customers will perceive a certain price range or a change in price. The three pricing strategies are prestige pricing, off pricing and bundle pricing. Lastly, price elasticity will be a measure of consumer’s price sensitivity (Paul P., 2018).
As reported by Paul P. (2018), pricing objectives should derive from the marketing objectives. One of our biggest competitors is Trulieve which is the leading provider in medical and recreational cannabis and CBD product. As the first and leading medical cannabis company, I believe that they will probably have many customers. However, since we offer a different service in the form of nail polish infused CBD, I believe that this is a plus that the customers will be happy to go to. Therefore, I believe that we will attract a great clientele. We will also aim to infuse our nail polish chemicals with good quality CBD which means we will not use harsh chemical solvents to isolate the CBD or remove all naturally (borncbd, 2019).
As mentioned previously, a company will determine its pricing objectives to fix prices. Once they know the financial objectives, they can go find pricing strategies that will help them achieve the objectives. There are different pricing strategies. One of them being skimming pricing strategy. The skimming pricing strategy consists of setting a high initial price for the product. This strategy targets individuals that are willing to pay a high price for the product. I believe that our product being quality, it will be expected that we will spend a good amount to get it manufactured in the cleanest way possible. Therefore, we will not be able to sell it at a low price and will be able to recoup our investment faster. Accordingly, the pricing approach that we will use is prestige pricing which occurs when a higher price is utilized to give an offering a high-quality image. Some stores have a quality image, and people perceive that perhaps the products from those stores are of higher quality (CC BY-NC-SA, 2015).
Reference:
Peter, J. P., & Donnelly, J. (2018). A Preface to Marketing Management (15th ed.). McGraw-Hill Higher Education (US). https://reader2.yuzu.com/books/9781260300147
[Author removed at request of original publisher]. (2015, October 27). Publisher information. Principles of Marketing. Retrieved December 2, 2022, from https://open.lib.umn.edu/principlesmarketing/front-matter/publisher-information/
Borncbd. (2019, March 8). High vs low quality CBD – borncbd. The Born Cannabidiol Co. Retrieved December 2, 2022, from https://borncbd.com/high-vs-low-quality/
Part 2(A) The only thing that needs to be done to this is the conclusion written. The conclusion should be between 200-400 words. Team Project – Written Assignment # 4 Pricing strategy is one of the most crucial steps into producing the best product. Our goal is for customers to perceive that our price of value is appropriate, and that the product is cost-effective within our company. P.E.A.C.K nail polish’s target market is consumers who purchase high-end trendy brands that contribute to their well-being. Our team intends to highlight the pricing objectives and show the key factors that led to the final selling price. Three Major Pricing Objectives When it comes to launching a new product in a growing market, price objectives are selected with your business and financial goals in mind. Elements of your business plan can guide your choice of a pricing objective and the strategies that go with it. Having pricing objectives is a critical area to focus on to make sure your product stands out. For our product and brand, we are focusing on three pricing objectives, maximizing profits, increasing sales, and matching competitors. We want to first focus on Maximizing profits. Profit maximization is a cycle business goes through to guarantee the best result and cost levels are accomplished to boost its profits (FutureLearn n.d.). Powerful factors, for example, deal cost, creation cost and result levels are changed by the firm as an approach to understanding its benefit objectives. Secondly, increasing sales values assume a vital part in the structure of steadfastness and trust among client and business (Barrington 2019). Trust and devotion are the primary justifications for why a client would decide to prescribe your organization to a companion or relative or compose an incredible survey of your item or administration on the web. Lastly, Matching competitors is used to further develop their business tasks and draw in additional clients (Prisync 2022). This approach is a phenomenal method for expanding brand steadfastness. It centers around beating the cost of comparable items to your rivals. When you carry out this technique, you can develop your business. The consequences of a cost match technique are clear a little while later. Surveying the suggestions, requiring entrepreneurs to comprehend the pattern and their situation in the retail industry is pivotal. You can pursue informed business choices when you get more data and work on your insight about your industry and rivals. Subsequently, you can expand your prosperity chances on the lookout. Final Price Pricing a product or service is one of the most important and involved decisions that a company will have to take. They need to find the right price range, as fixing a price too high may cause customers to go for the competition with a more affordable price and fixing it too low can gain them customers but might still hurt profitability. Therefore, a company must carefully consider the pricing strategy process when introducing a new product or considering a price change (Paul P., 2018). There are three different factors to be considered: demographic, psychological and price elasticity. Demographic factors will want to investigate the number of potential buyers, their location, their economic strength etc. Psychological factors investigate a buyer’s subjective perceptions and price elasticity will be a measurement of consumer’s price sensitivity. The price of a product will have to cover the cost of production, promotion and distribution, plus the profit. Similarly, there are other things to consider when thinking of the customers which are the other costs involved including time costs, psychological costs and behavioral costs. As a drug company, we will use the high/low method and will charge prices that are above competitors but will promote frequent sales that lower the prices (Paul P., 2018). It can be beneficial as it can increase profits, create excitement as the customers will rush in to get the products while they are on sale and allows us to sell slow-moving merchandise. To fix a price, we will use breakeven point and the return on investment. Our nail polish will be non-toxic, and our CBD product will be of the highest quality as we will encourage healthier habits. To manufacture CBD oil, let’s say that our production and sales will be $75,000 units at a total manufacturing cost of 1,750,000 and we want a before tax return of 30%. Our selling point will have to be: (1750000 + 0.30 x 1750000)/ 75,000= $107.7. Let’s not calculate our break-even point. Let’s say that our total monthly fixed cost is $11,668 considering mortgage, utilities, wages, advertising and other expenses. And our monthly variable cost is $1635, our break- even point will be $11668/ (1- (1635/107.7)) = $833.43. Projection of Costs & Profits Monthly Quarterly Yearly Projected Revenue Fixed Costs: Mortgage $1,300 $3,900 $15,600 Utilities $285 $855 $3,420 Wages (4 employees) $7,333 $21,999 $87,996 Advertising $1,750 $5,250 $21,000 ETC. $1,000 $3,000 $12,000 TOTAL FIXED COSTS $11,668 $35,004 $140,016 Variable Costs: Hourly Wages 0 0 0 Overhead $450 $1,350 $5,400 Materials $500 $1,500 $6,000 Supplies $150 $450 $1,800 Mail/Phone $35 $105 $420 ETC. $500 $1,500 $6,000 TOTAL VARIABLE COSTS $ 1,635 $ 4,905 $ 19,620 Total Costs $10,033 $30,099 $120,396 Expected Revenue Yr1 Months 1 2 3 4 5 6 7 8 9 10 11 12 Units Sold 3250 4250 6250 6250 7250 7750 7750 7000 6500 6250 6250 6250 Price per Unit $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 Total $81,250 $106,250 $156,250 $156,250 $181,250 $193,750 $193,750 $175,000 $162,500 $156,250 $156,250 $156,250 Total (12 Months) $1,875,000 Yr 2 Q1 Q2 Q3 Q4 Units Sold 13,750 21,250 22,000 18,750 Price Per Unit $25 $25 $25 $25 Total $343,750 $531,250 $550,000 $468,750 Total 4Q $1,893,750 Yr 3 Q1 Q2 Q3 Q4 Units Sold 13750 21250 22000 18750 Price per Unit $25 $25 $25 $25 Total $343,750 $531,250 $550,000 $468,750 Total 4Q $1,893,750 Conclusion Summarize key points here. Make sure that you have cited at least two authored sources and your textbook – remember an authored source must have a first and last name. Page Break References Barrington, R. (2019, July 22). The important role of sales in an organization. Oxford College of Marketing Blog. https://blog.oxfordcollegeofmarketing.com/2014/10/17/the-important-role-of-sales-in-an-organisation/#:~:text=Business%20Growth,your%20product%20or%20service%20online. Price matching: Pros & Cons [and why Giants love it so much]. Prisync. (2022, September 29). https://prisync.com/blog/price-matching/#:~:text=Companies%20use%20price%20match%20policies,way%20to%20increase%20brand%20loyalty. Profit maximisation. FutureLearn. (n.d.). https://www.futurelearn.com/info/courses/introduction-to-financial-management-in-construction-and-basic-accounting-conventions/0/steps/46432

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