Course Project- Consideration of Pricing Decisions.
B. e-Pricing Decisions
1. Value-Creation (how the customer receives value from the firm beyond the materials cost to manufacture the good)
A. Costs (both tangible and intangible)
Because Curves Fitness Centers are franchised, it will be up to the local store manager to decide if they want to sell shoes and apparel at their store.
b. Profit margin in the industry and for the firm
Curves Fitness Center’s 3 main competitors are selling their merchandise at no more than a 25 percent. The competition effecting Curves are the large on –line woman’s apparel companies that are selling at close to cost.
3. Method to Establish Price and Price Reductions.
A. Determine the method to set price: i.e. Cost –plus or a demand-driven approach and JUSTIFY why price is set by that method and at that price. After looking at the various methods in establishing the price for our products, we feel that a Target Profit Method would provide Curves Fitness Centers with the best chances of maintaining a profit. Here is an example: Nike Shoe Company’s Fitness Training Shoes cost Nike $41.00 to product and is passing that cost to Curves Fitness Centers. In order to sell the shoe and maintain a profit-margin of no less that 25%, Curves Fitness Center will sell the shoe for $54.95. We also determine that selling all merchandise with 95 cents or 99 cents at the end have been proven to sell very well on the internet. Our competition is also using the method in the advertised price.
B. Identify discounts & reasons for them, sales, and other price reductions, the depth (actual values) of the reductions, time scheduling of them and justification for the price adaptations. We have determined that discounts are needed for perishable items (items with an expiration date) after 60 days. These items include protein shakes, supplement and dietary vitamins and energy bars and drinks). Locate Curves Fitness...
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