Marketing Glitz

Topics: Marketing, Pricing, Variable cost Pages: 4 (1272 words) Published: November 14, 2012
1003 MKT Individual Assignment - Glitzz Case Study 1. What factors influence the pricing decisions for a product such as Glitzz? Analyze the factors and comment on the range of prices that can be set for Glitzz.

The factors that influence the pricing decisions for Glitzz are the pricing objectives, costs, and demand. The pricing objectives will be needed to direct the role of the price in the market. Higher prices will need to be set if the objective is to have higher profit margin instead of higher market share. However, if the objective is to survive in the industry, the prices need to be low to get more sales to meet its operating cost. For the case of Glitzz, the pricing objective is between having higher market share and to survive in the industry. Costs play an important role in the pricing decision as it set the minimum price for the product in order for the company to operate and cover their cost to prevent losses. There are five cost concepts, namely the fixed cost, variable cost, unit variable cost and marginal cost and total cost. Fixed cost is the sum of expense of the firm that is stable and do not change with the quantity of a product that is produced and sold. The fixed cost for Glitzz would be the machineries, rent of factory building, and insurance. The variable cost is the sum of expenses of that firm that vary directly with the quantity of the product that is produced and sold. The variable cost for Glitzz would be direct labour and raw material used to produce the bottle of jewelry cleaner. Total cost is the total expense incurred by the firm in the process of producing and marketing the product. Unit variable cost is the variable cost expressed on per unit basis and the marginal cost is the change in the total cost that results from producing and marketing one additional unit of product. Demand is also one of the important factors for pricing decision as it helps to relate the quantity sold with the price. Demand is dependent on the key...
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