Here is the synopsis of our sample research paper on Pricing Strategy. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 12 page paper examines a case provided by the student. Stockholders of an organization have suggested that the organization lower the price of product or service by 20 percent as a means to maximize profit by increasing market share. The paper uses a break even analysis, consideration of price elasticity and the use of Porters Five Forces to consider if lowering the price is the best strategy for increasing profit and/or market share. The potential reactions of competitors are also considered. The paper is written to show the student the different aspects that need to be examined when looking at pricing strategy and shows them how to undertake this, with example calculations. The bibliography cites 7 sources.
Page Count:
12 pages (~225 words per page)
File: TS14_TEprices.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
markets in the current economic downturn(Anonymous, 2002). However, this sector is also increasingly competitive. In the case supplied by the student there is concern over the sales level, with stockholders
pushing for a reduction in price. The reason for this is a belief that if the price is reduced the number of cars sold will increase and increase the profits
with numbers of sales compensating for the reduction in profit level per car. To consider if this is a viable stratagem the
issues of break even point and price elasticity need to be considered. This also needs to be considered in the context of the competitive environment and how the company may
need to develop a wider strategy. The lure of market share is often attractive to stockholders, with the concept that bigger is better. However, just as there are economies of
scale, there are also diseconomies of scale. With a luxury car the production facilities are likely to have constraints on the number that can be produced. For example, if
production costs are estimated at 20,000 variable costs and then fixed costs can be added on there is the result of a reduction of the overall cost of each car
as more are produced as the fixed costs are divided by the number of cars made. For example; 2.5 million divided by 417 cars are 5995, meaning that for a
production run of 417 cars in a set period the total production cost will be 20,5995. Where there is additional capacity and more cars are produced without the need for
more overheads the amount of fixed cost per car will be less and reduce the production costs. For example, if 3125 cars are produced the fixed costs attributable to each
...