Assignment 1: Finding the Leader in You: Self-Assessment / Johari Window
April 28, 2014
Compute the elasticitites for each independent variable
Price=-10*8000 = -.6107 Inelastic 131,000
Advertising= 1500*8000=91.603 Elastic 131,000
PX= Price of leading competitors product
5*8000= .3053 Inelastic
I=Per Capita Income
Determine the Implications for each of the computed elasticities for the business in terms of short term and long term pricing strategies. Provide rationale in which you cite your results.
The practice of price strategies
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April introduction of low-calorie approach is deemed within 26 market standpoints new product with a great deal of apprehension because they have no precedent on which to base their decision. If the new product’s price is excessively high, it is in danger of failing because of low sales volume (Scarborough, 2005). However, if it is priced too low, the product’s sales revenue might not cover costs. When pricing any new product, the owner should try to satisfy these objectives: Maintaining market share as competition grows. If a new product is successful, competitors will enter the market, and the small company must work to expand or at least maintain its market share. Continuously reappraising the product’s price at Advertising at 91.603 elastic in conjunction with special advertising and promotion techniques helps to retain a satisfactory market share. 91 percent increase allow earning profit should not introduce a new product at a price below cost because it is much easier to lower a price than to increase it once the product is on the market(Scarborough, 2005).
Recommend whether you believe that this firm should or should not cut its price to increase its market share. Provide support for your recommendation.
The value of low calorie microwave food that gather research information from competitors offerings, has seclude information on whether the market has been exposed to many other similar offerings. The 26 supermarkets sales figures