Marketing Pricing process and decisions paper

Pricing Decisions Worksheet: Chapters 19 & 20

Costs of Marketing Plan

Identify the costs associated with these elements of your marketing plan:

Feature	Cost
Product Manufacturing Costs (1 Bar): Labor (direct and indirect) Raw materials Packaging Overhead: Fixed Overhead: Variable Total Manufacturing costs per bar:
Marketing Costs: Market Research: Primary: Secondary:
SALES:
Sales force compensation:
Intermediaries (Brokers - assume 5% of sales)
Distribution network:
Promotion: On-line promotion
Off-line promotion
Promotional tools design
Promotional tools production
Media Costs
Web site development – design & hosting
Social Media development and execution
Other Total

BREAK-EVEN

Define Break-Even Point:

Calculate the break-even point for your bar:

Break even = $

Can you sell enough to cover costs? Yes No

Strategy

Discuss and defend your pricing strategy:

Penetration

Skimming

Status-quo

Where is your product in the PLC?

Introductory

Growth

Maturity

Decline

How does this affect your pricing strategy?

Elasticity

List tactics to soften price sensitivity in on-line world:

Price Comparison

Compare your price to your competitors.

Competitor	Price/Bar	Price/oz.
1.
2.
3.
4.
5.
6.
7.
8.

Price Communication Strategy: Describe how you will communicate your pricing to your target market (differential advantage):

Discounts

Discuss discount pros and cons to on-line customers

Identify which of these discounts will positively impact your target market? Why?

Quantity Cash Free Shipping

Seasonal Promotional Rebates

Identify the discounts you will offer to brick and mortar customers. Defend.

Quantity	Cash	Functional
Seasonal	Promotional Rebates

Distribution

Will wholesale customers pay shipping? Yes No

Will all wholesale customers pay same shipping? Yes No

Will they pay shipping based on distance? Yes No

Rationale:

Special Pricing Tactics

Discuss pros and cons of each of these pricing tactics in relation to your bar and your target market. How price sensitive are they?

Single-price Flexible price Service pricing Price lining

Leader pricing Odd-even Bundling Two-part

SPECIAL PROMOTION IDEAS

Create 3 bundling offers.

Discuss which would most likely appeal to your target market? Why?

Bundled package	Component 1	Component 2	Component 3
Package 1 Price
Package 2 Price
Package 3 Price

ENVIRONMENTAL FACTORS AND PRICE SENSITIVITY

Identify environmental factors affecting pricing:

Discuss your pricing strategy during inflation:

Discuss your pricing strategy during recession: