Pricing-Opinion Essentially, Pricing Approaches Can Essay

Open, View, and/or
Download this Document

Total Length: 718 words ( 2 double-spaced pages)

Total Sources: 0

Page 1 of 2

On the other hand, her second goal of settling her overhead costs would be met as mark-up pricing allows Sherry to factor in overhead costs in the price to be charged.

In regard to group 2 clients, it would be prudent for Sherry to use competition-based approach to pricing. It is however important to note that Sherry could also settle for mark-up pricing in this case as the approach would enable her to factor in a profit for herself over and above the total costs incurred (both fixed and variable). Competition-based pricing seeks to base the price of goods and services on the price the market leader charges for its services and products. Hence in this case, Sherry would be benchmarking her pricing on the price the market leader charges as far as the massage marketplace is concerned. In my opinion, before settling on this approach, Sherry should first take into consideration her costs and the actual profit she would want to make on the services she offers.

Stuck Writing Your "Pricing-Opinion Essentially, Pricing Approaches Can" Essay?

View All Our Example Pricing-Opinion Essentially, Pricing Approaches Can Essay

Have A Custom Example Essay Written

If the two appear to be higher than the competition-based price, then it would be prudent to embrace the mark-up pricing approach. However, if her costs plus proposed profit are lower than the competition-based price, she should adopt the competition-based pricing approach as in this case; she could price her services just below what other service providers are charging so as to attract clients. This is more so the case given the fact that she is a new entrant.

Computation: Cost to the Manufacturer

Markup on the manufacturer's cost = 20%

Markup on the wholesaler's cost = 50%

Markup on the retailer's cost = 100%

In this case, I take the cost to the manufacturer of producing the table to be x. In that regard;

Manufacturer selling price = x + (x * 0.2) = 1.2x

Wholesaler selling price = x + (1.2x * 0.5) = 1.6x

Retailer selling price = x + (1.6x * 1.6x) = 3.56x

Hence in that case, taking.....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Pricing-Opinion Essentially Pricing Approaches Can" (2011, May 21) Retrieved May 16, 2025, from
https://www.aceyourpaper.com/essays/pricing-opinion-essentially-pricing-approaches-44872

Latest MLA Format (8th edition)

Copy Reference
"Pricing-Opinion Essentially Pricing Approaches Can" 21 May 2011. Web.16 May. 2025. <
https://www.aceyourpaper.com/essays/pricing-opinion-essentially-pricing-approaches-44872>

Latest Chicago Format (16th edition)

Copy Reference
"Pricing-Opinion Essentially Pricing Approaches Can", 21 May 2011, Accessed.16 May. 2025,
https://www.aceyourpaper.com/essays/pricing-opinion-essentially-pricing-approaches-44872
   

Open, View, and/or
Download this Document
order custom essay example