Describe the factors that the Marketing Manager of Olympian Ltd should consider when deciding on the selling price of their new range of Hoodie Tracksuits. - Leaving Cert Business - Question C - 2009
Question C
Describe the factors that the Marketing Manager of Olympian Ltd should consider when deciding on the selling price of their new range of Hoodie Tracksuits.
Worked Solution & Example Answer:Describe the factors that the Marketing Manager of Olympian Ltd should consider when deciding on the selling price of their new range of Hoodie Tracksuits. - Leaving Cert Business - Question C - 2009
Step 1
Costs
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Answer
The selling price should cover all costs associated with the production, marketing, and distribution of the Hoodie Tracksuits. This includes costs related to materials, labor, and overhead, ensuring that a profit margin is added on top of cost-plus pricing to achieve financial sustainability.
Step 2
Competitors Prices
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Answer
In the competitive sportswear market, it's crucial to analyze competitors' prices. The Marketing Manager must consider prevailing market prices to determine a competitive selling price that can attract customers while ensuring profitability.
Step 3
Type of Product
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Answer
Given that the tracksuits are branded, they can command a higher price point. The Marketing Manager should strategically price the Hoodie Tracksuits to reflect their premium nature, aligning the price with the quality and brand image.
Step 4
Stage of Product Life Cycle
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Answer
As new products typically have a higher introductory price, utilizing price skimming can help recover initial development and marketing costs. Considering where the product lies in its life cycle will influence pricing strategies to maximize profitability.
Step 5
Consumers
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Answer
Understanding the target market, identified as the teenage demographic, is essential in setting the selling price. The price should reflect what teenagers are willing to pay, taking into account their spending power and potential preferences for value versus brand prestige.
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