MGMA01H3 Chapter Notes - Chapter 14: Marketing Mix

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15 Apr 2011

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Introduction: many pricing issues that the manager must understand, include the setting of pricing policies, strategic decisions as to the level at which price should be set, and the numerous day-to-day issues in pricing management. A pricing decision flow chart: a marketing approach to pricing begins and ends with the company"s marketing strategy, it sets the general parameters for pricing decisions and becomes the reference point against which pricing effectiveness is measured. Establish pricing objectives: objectives can relate to profits, volume, competition, or prestige, once pricing objectives have been established, economic and cost, and consumer analysis takes place. the firm cannot price below its variable cost of product without losing money on each sale: long run. there has to be some contribution to overhead. Establish an initial price: competitive analysis and legal and ethical analysis will almost always result in a price that is somewhere between the floor and the ceiling.

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44) The price of coffee beans rises on the international market by 7%. Because of its higher raw material costs, The Highland Creek Coffee Shop raises the price of its regular sized coffee by 5%. At the same time, Starbucks raises the price of its coffee at all of its Canadian locations by 9%. This kind of pricing decisions would suggest these businesses are engaged in: a) b) perfect competition a monopoly an oligopoly monopolistic competition

1. A marketing manager makes decisions about the following factors: product, price, promotion, and place. These factors are known as the: a) Environmental factors b) Marketing program c) Marketing mix d) Marketing concept e) Marketing process

5) The price of coffee beans rises on the international market by 5%. Because of its higher raw material costs, The Highland Creek Coffee Shop ( a local coffe shop located about a mile from UTSC) raises the price of its regular sized coffee by 5%. The Mom and Pop Coffee Shop at the corner of Kingston Road and Morningside also raises its prices by 5.% Ed's Shed, a coffee shop on Ellesmere, raises its prices by 4%. At the same time, Starbucks raises the price of its coffee at all 400+ of its Canadian locations by 10%. This kind of pricing decisions would suggest that the market for coffee in Eastern Toronto, and the GTA is: a) b) c) perfectly competitive a monopoly an oligopoly monopolistic competition d)

MGMA01H3 Chapter Notes - Chapter 14: Marketing Mix

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