Strategic Marketing Pricing Essay

1039 Words 5 Pages
Pricing Striates 2
1. Contribution is calculated based on price and costs. Often, we treat these variables as fixed. What are the implications of treating uncertain variables as fixed?
Some of the implications of uncertain variables could be payroll. You would have to have some baseline of how much you would be paying out every week. Someone may be out sick and you don’t replace the hours or you replace the hours with another employee that has a wage Running an advertisement in the newspaper that you have changed to size that you want to put in the paper that would change the price either way it could be more or it could be less. If you have delivery service than there would the price of gas changes from week to week.
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It all comes down to how per unit the product sold for. The units are 800.00 a piece and sold 5 that would equal 40,000.00. Now the store manager wanted to get rid of a product because it was kicking around for too long. He decreases the price to 600.00 a piece and sold the last 5 that would equal 30,000.00 now he has lost 10,000.00 now times that how many times the store manager has done that it would be a disaster.
3. Who in the organization should have the right to make the pricing decision (e.g., sales, marketing, etc.)?
4. If you’re in a company that has stores nationwide such as Michaels’ Arts And crafts has over thousand stores and the people that make the decision on the pricing is corporate offices. I do believe that corporate should listen to the store managers in the stores because they know what the store sells better than, anyone. He or she knows what the customers like and don’t like after you have been a store for a while you begin to know and see the regular customers comes back. They will tell what they don’t like and what they would like to see come into the store. Most of the marketing is based on what we sell so if blue paint doesn’t sell but red paint sells they are going to get rid of the blue paint. At times corporate changes items to clearance too soon and customers become annoyed because they think you’re going out of business. Example: We have

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