Product+Pricing

**__ Monday, February 27 __**
1. Read Prices and Economics 2. Complete the assignment

//Use Google Docs for all classwork. Share with Mrs. Grams//


 * // Reviewing What Your Read //**

- price (marketing definition)
 * Define:**

1. What factors influence prices? 2. What is elasticity of demand? 3. What is inelastic demand? 4. Explain how prices influence customer satisfaction. 5. Compare price and non-price competition.

Exercise: 1. Using the inforamtion in the chart below, calculate the missing amounts.

Cost || Operating Expenses || Selling Price || Net Profit ||
 * Product
 * $120.00 || $ 40.00 ||  || $ 15.00 ||
 * $13.00 || $ 16.00 || $ 58.00 ||  ||
 * $ .75 || $ .12 ||  || $7.00 ||
 * $ 865.00 ||  || $995.00 || $ 27.50 ||
 * || $ 12.75 || $ 38.50 || $ 5.25 ||
 * $ 10.00 || $6.50 ||  || $ 2.00 ||
 * 0 || $ 25.00 || $ 80.00 ||  ||

1. Read Components of Price 2. Complete the assignment

//Use Google Docs for all classwork. Share with Mrs. Grams//


 * // Reviewing What Your Read //**

- selling price - cost of goods sold - operating expenses - gross profit (margin) - net profit - markup - markdown
 * Define:**

// Exercise: // Jerry Brown has operated successful dog grooming service for ten years. Each year his number of customers has grown as satisfied customers have told othrs of his service. His expenses have always been quite low since he is the only employee and he operates the business from one-half of his garage that he remodeled ito a small office and grooming area. For many year, the number of dog owners has increased in his town, but that growth has now almost stopped.

In the past two years, three other competing grooming services have started. One is being offered by a veterinarian to serve primarily her customers. Another is part of a chain of pet grooming stores that is about three times as big as Jerry's business, and is located in a larger city 15 miles away. The newest competitor is a small partnership consisting of two people who are doing grooming on a part-time basis. They are only open two evenings a week and on Saturdays. Until recently, Jerry has not been too concerned about the competition. He believed he had loyal customers and was regularly getting inquiries from new pet owners. However, recently he has noticed few new people calling to ask about grooming and some of his regular customers have not returned for their regular grooming appointments. In talking to some of his current customers, he learns that the chain store and the partnership are both offering grooming services at a much lower price than he offers.

Jerry does not want to lower his price because that will decrease his profits. His goal has always been to use the profits to buy a building and expand his business. Also he believes his service is better than that offered by competitors.

a. How can Jerry decide whether he should lower his price? b. If Jerry wants to emphasize non-price competition, what are some recommendations you would make to him in the areas of product, place, and promotion that could help him increase customer satisfaction?

**__ Wednesday, February 29 LEAP DAY! __**
1. Read Product Price 2. Complete the assignment //Use Google Docs for all classwork. Share with Mrs. Grams// - skimming price - penetration price - competition pricing - bundle pricing - pyschological pricing
 * // Reviewing What Your Read //**
 * Define:**

// Exercise: // Most calculators come with a book of instructions. Unfortunately, if you misplace the book, you're left to your own devices in figuring out how to use the calculator. Wouldn't it be easier if the calculator had a built-in "help" function similar to the one on your computer? You could just punch the "Help" key on your keypad and call up the relevant instructions on your display screen. You just invented a calculator with this feature, and you're ready to roll it out. First, however, you have to make a pricing decision. . . When you introduce the product, which pricing strategy would you use? //Explain and justify your choice of pricing.//
 * 1**

1. Play the [|Lemonade Stand] game.You will play for 14 days. This is your business. You are an entrpreneur!
 * Exercise: **

2. Print the worksheet or create your own worksheet. Fill in the necessary information. You can do calculations once you have completed your sales for the 14 days. //Do not compute any markup on sales.at this time.//

You'll have complete control over almost every part of your business, including pricing, quality control, inventory control, and purchasing supplies. You'll also have to deal with the weather, which can be unpredictable. Unfortunately, the weather will play a big part when customers are deciding whether or not to buy your product.

Other factors which will make or break your business is the price you charge. Customers are more apt to pay higher prices when the product (your lemonade) is more in demand - When the weather is hotter. As the temperature drops, and the weather turns bad (overcast, cloudy, rain), don't expect them to pay nearly what they would on a hot, hazy day.

The other major factor which comes into play is your customer's satisfaction.

You are starting with $20.00 on Day 1. First, you need to purchase cups, lemons, sugar, and ice cubes. the temperature should reach 73 degrees.

1. Read Government Influence on Prices 2. Click this[| link]to read a review of Pricing. (pages 19 - 21) 3. Review the //Key Math Concepts// and //Key Terms// for Pricing. (page 22) 4. Complete the assignment.

//Use Google Docs for all classwork. Share with Mrs. Grams//
 * // Reviewing What Your Read //**

- selling price - cost of goods sold - operating expenses - gross profit (margin) - net profit - markup - markdown
 * Define:**
 * Exercises: **
 * 1.** Compute the selling price of a sports drink that has a cost of $1.25 per item. The store needs to generate a profit of $.50 per item.
 * 2.** Compute the new selling price for a group of sun visors that are currently selling for $6.00 each and that will receive a markdown of 25%.
 * 3.** Computer the selling price of a bottle of laundry detergent that has a cost of $8.75 and a markup percentage of 40%.


 * 4.** Your store has just received a shipment of heavily advertised new brand of potato chips. You know that your store is not the only one in your area selling these chips. The cost and profit margin for the chips suggests a selling price of $2.75 per bag. Considering all factors, determine the selling price of the chips for your store and provide the reasons for your decision.


 * 5.** Your stock of ceramic coffee mugs is not selling as projected. so you would like to apply a markdown. The current selling price of the coffee mugs is $5.00 each. Recommend a new selling price for the mugs and explain the reasons for your recommendation.


 * 6.** Your store has been losing market share in Freezies, a frozen beverage. Create a list of possible cause**s** for the loss of market share and list some way**s** that can help your store regain its market share.

1. Analyze the Lemonade Stand Worksheet from Thursday's assignment. 2. Review for test
 * __ Monday, March 5: __**
 * What would you do differently now so that you could make a bigger profit?
 * Some days you sold few, or no, cups of lemonade. What made the difference in sales for those days?
 * When the weather was cloudy and cool, you increased the price of a cup of lemonade. Explain why you choose to do that.

**__ Tuesday, March 6: __**
TEST - Pricing