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
Advertising= 1500*8000=91.603 Elastic
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 ...view middle of the document...
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 are readily available, total market sales are more difficult to determine. Usually, this information is available from trade associations and market research firms (“Economics”). Market share often is associated with profitability and thus many firms seek to increase their sales relative to competitors. Px= Price of leading competitors product are inelastic at a steady paced at a .3053 Here are some specific reasons that a firm may seek to increase its market share higher volume can be instrumental in developing a cost advantage. Price forecasted to -.6107 the low calorie microwaveable brand can afford to offering massive product at a reasonable introductory price and then determine the demand and supply patterns of consumers, and can examine progress in a later date. To conclude recommendation low price in an introduction stage can determine your long term success with forecasting results, your target customers and in progressing times the increase of supply if demand reflects.
Demand Curve: Formula: 20,000+1,500*64+5*9,000+10*5,000=211,000
211,000-10P (100, 200, 300, 400, 500, 600,)
Plotted: 1. 210,000 2. 209,000 3. 208,000 4. 207,000 5. 206,000 6. 205,000
There No equilibrium price and quantity demanded.
5200-45P (100, 200, 300, 400, 500, 600,)
Plotted: 1. 700 2.- 3,800 3. -8,300 4. -12,800 5. 17,300 6. -21,800
Indicate the crucial factors that could cause rightward shifts and leftward shifts of the demand and supply curves.