Outline the factors a marketing manager might consider in determining the selling price of products at 'All-Weather Wellies Ltd'. - Leaving Cert Business - Question C - 2013
Question C
Outline the factors a marketing manager might consider in determining the selling price of products at 'All-Weather Wellies Ltd'.
Worked Solution & Example Answer:Outline the factors a marketing manager might consider in determining the selling price of products at 'All-Weather Wellies Ltd'. - Leaving Cert Business - Question C - 2013
Step 1
Costs
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Answer
The marketing manager must ensure that the selling price covers all relevant costs, including production, marketing, and distribution. Additionally, factoring in a profit margin is essential. A break-even analysis can help determine the lowest price needed to cover costs.
Step 2
Competitors' Prices
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Answer
Understanding competitors' pricing strategies is crucial as the footwear industry is highly competitive. 'All-Weather Wellies Ltd' should monitor competitor prices to set a competitive price point, potentially adopting strategies like penetration pricing to gain market share.
Step 3
Product/Image
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Answer
The perceived value of the brand affects pricing. If 'All-Weather Wellies Ltd' is positioned as a premium brand, the price may be set higher to reflect this image, appealing to consumers who associate higher prices with superior quality.
Step 4
Stage of Product Life Cycle
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The selling price may vary depending on where the product is in its life cycle. For new products, a higher price may be necessary to recoup research and development costs, while established products may require more competitive pricing.
Step 5
Consumers
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The target market significantly influences pricing. The marketing manager should consider consumer behavior, preferences, and purchasing power to align the product's price with what the target demographic is willing to pay.
Step 6
Demand
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Anticipation of demand fluctuations is essential. If 'All-Weather Wellies Ltd' expects high demand for new products, especially during peak seasons, they may set higher introductory prices, adjusting as necessary based on market response.
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