Assignment
It's time to crunch some numbers! Your boss has just given you an important, high priority assignment. The company's core business product has shown steadily shrinking profitability and you've been asked to address the problem by coming up with at least one new pricing technique. Your boss and the regional VP of Finance will meet with you at the end of the month to hear your proposal.
Prior to the meeting, your boss would like to see a brief Memo that outlines your proposal and the impact you expect it to have on units sold and profits. The VP of Finance is new to the company, so you will also need to include a section that contains a brief description of the product and its history.
Your Assignment:
Develop a 2-3 page Executive Memo for your boss. Use the Outline below to structure your Memo:
1. Describe the company's product or service using appropriate economic terminology. Questions to address include, but are not limited to:
1. What is the product or service? What Utility or benefit does it provide to the consumer?
2. What is your company's history with this product or service?
3. What does the competition in the market look like for this product or service?
4. What actions has your company taken to remain competitive?
2. Provide one or more specific proposals for price discrimination.
1. Which Price Discrimination technique(s) will you use?
2. In order for your proposal to generate more profits, will you recommend Mark-up or Margin pricing? Why?
3. What is the current price? What will be the new price?
3. Explain how implementing your proposal is expected to impact consumer demand.
1. How will your proposal impact sales in the first three months?
2. How will your proposal impact sales within eighteen months?
3. What would increased sales enable the company to do differently?