Strategic Pricing with Rising Commodity Prices
Please review the articles listed below. They can be located by using the Kaplan Online Library article search feature accessed via the home area of the course.
Then, prepare your Discussion topic responses in accordance with the instructions found below.
Access the following articles in the KU Online Library:
A Rising Tide Lifts All Boats: The Impact of Food Inflation on European Food Retailers. (2011). Black Book - Four Ways to Play Soft Commodity Inflation, (Business Source Complete.) New York, N.Y: Bernstein Global Wealth Management, 85-95.Emerson, L. (2012, March 11) Higher gas prices affect prices of other consumer goods. The Augusta Chronicle.
Redenius, J., Hogbin, C., Stirling, T., & Warburton, M. (2011). Four Ways to Play Soft Commodity Inflation. Black Book - Four Ways to Play Soft Commodity Inflation, (Business Source Complete.) New York, N.Y: Bernstein Global Wealth Management, 1-106.
Simos, E. (2011) Rising oil prices intensify global stagflation. Journal of Business Forecasting, 30(1), 36-40.
Instructions:
Just because there is an economic downturn does not mean that consumer prices will fall. Even though gas prices might plummet, it does not necessarily equate to lower gas prices as experienced by consumers at the gas pump (Emerson, 2012).
Fuel oil prices have remained high from 2013-2015. Industry forecasts do not indicate declining fuel prices in the near future. According to forecasts, fuel prices will remain near or above $3.00 per gallon well into 2016.
In the global economy fuel prices can affect many other aspects of daily living including food prices. Country governments in pressuring energy companies to provide more bio-diesel fuel which relies on corn has subsequently exacerbated a shortage of this food item which in turn has driven prices of corn up (Rice, 2011).
Checklist:
1. Explain how you believe the rising prices affect strategic pricing decisions made by companies that produce packaged food, cereals, canned meats and other common products found in a supermarket.
2. Your Discussion should include an examination of how consumer behavior might impact those pricing, marketing, and packaging decisions.
3. Include any personal anecdotal experiences you have had with one or two items you or your family buy regularly. Let classmates and instructor know if you have discovered any techniques for reducing costs used by the manufacturer or marketer for your products that seem particularly unique or unusual. For example, does the inside roller for your bathroom tissue seem to be growing in diameter?