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CHAPTER 7 QUESTIONS (DUST PROOF GLASS) - Coggle Diagram
CHAPTER 7 QUESTIONS
(DUST PROOF GLASS)
How do you determine the pricing for Dust Proof Glass?
Analyse the costs and overhead
Analyzing the cost and overhead is one of the steps that should be done during the process of production. This is because it can let the company update the price before costing the Dust Proof Glass. I will list out the details of price used for produce the Dust Proof Glass
Cost Raw Materials
Silica
RM7.50 per kg
Sodium potassium carbonate
RM51.70 per kg
Managanese oxide
RM27.00 per kg
Lead oxide
RM 25.50 per kg
Transportation Cost
Logistics Lorry RM550.00 ( estimated)
Utility Cost
Electricity, water, etc RM5370.00 ( estimated)
Analyse Size and Composition of Target Market
By estimating the potential of dust proof glass in the target market segment and how big the market for dust proof glass is and seeing whether the market is a growing, stagnant, or receding market. And by understanding the competitive products of dust proof glass so that we can see whether our dust proof glass products will have sufficient customers and study the strengths or weaknesses of competitors so that we can set a target position for dust proof glass products to price our products
Evaluate the products uniqueness
Our Dust proof glass products must be different from competing products so that they can provide value for buyers, because the bigger the difference between us and competing products, the bigger the price difference will be. We also have to be careful about the differences that dust proof glass has with competing products so that we can give it a premium price and customers choose our products. In durable products such as dust proof glass, consumers are more likely to see and compare the features or qualities of the product. So we must provide a good experience for customers for our dust proof glass products so that they will be much more difficult to switch to competing products with the same price and features. To understand how a new product or feature will be perceived by consumers, we can always do some form of Marketing Test or Field Test in the market
Select distribution channels
Primary Cost
(handling transport from manufacturing unit to wholesaler and distributor)
Price Estimated: RM15.50 / piece
Secondary Cost
(cost of margin to distributor & retailer)
Price Estimated: RM30.50 / piece
Understand product price elasticity
In setting the price, we must also pay attention to the price elasticity for pricing of dust proof glass products. Because if the price elasticity is greater, it means that the price of our product is closer to that of similar competitors. If we do not pay attention to price elasticity in pricing, even though our dust proof glass products are unique, consumers will not have our products if there are similar competitive options at low prices.
Stage in product life cycles
We will adapt our pricing strategy to the stage of the product life cycle in which our products are located. In order to maintain the price as dust proof glass products move towards maturity, we have to add more features or change the appearance of dust proof glass to keep it at the same price. Because many product categories have significant evolutions and life cycles that can influence pricing decisions.
Estimating sales at different prices
Before pricing a dust proof glass product, we must make a final analysis of how many sales we are likely to achieve. We had to analyze several price points and matched them with our goals such as: meeting financial goals, covering goods and overhead costs, marketing expenses, paying sales commissions and distributor markups, transportation costs. In addition we have to analyze competitors and their pricing strategies and value offerings as consumers perceive them to see their impact on sales. Lastly we must also take into account the sensitivity of the market price. The experience of the marketer will come into play and his knowledge of the market will help in making decisions in the determination of our Dust proof glass products.
Determine the type of pricing that suitable for Dust Proof Glass
Promotional Pricing
Can make the promotion during roadshow event or peak construction period to attract customers such as designers or constructors to buy it due to the reduction of the price.
Sales and Promotion
for instances, during the member day or give discounts and vouchers for those who buy the glass and hit the target limit will have the chance to win the mystery prize. This can increase the demand for products and attract more consumers to buy glass.
Markdown
can do the temporary markdown price on the dust-proof glass due to the decreased demand in the market. So, the markdown price temporarily can attract the customers to purchase it although purchase through online or physically because have more cheaper price.p
Bundle Pricing
this can induce consumers' desire to buy because the "Buy1 Free 1" promotion will let them realize that the overall cost of the product is reduced and the price have cheaper. Even though this kind of pricing will let the company have less profit, but can take this chance to create new customers and have a higher demand for this dust-proof glass in the market.
Group 3 Members:
Ling Chee Yen
Alvina Dini
Aria
Rizky