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POM Week 2

This document discusses a marketing student's assignments on product cost estimation and pricing strategy. It provides an example cost estimation showing variable, fixed, and total production costs. It then discusses factors to consider when setting prices, such as competitors, costs, demand, economic conditions, and other elements of the marketing mix. Different pricing approaches are also enumerated, including price skimming, penetration pricing, economy pricing, promotional pricing, and marginal pricing. Two companies' pricing strategies amid COVID-19 are compared - a premium tea house and affordable milk tea shop. Objectives are matched with appropriate pricing strategies.

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Cj De las Alas
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40 views

POM Week 2

This document discusses a marketing student's assignments on product cost estimation and pricing strategy. It provides an example cost estimation showing variable, fixed, and total production costs. It then discusses factors to consider when setting prices, such as competitors, costs, demand, economic conditions, and other elements of the marketing mix. Different pricing approaches are also enumerated, including price skimming, penetration pricing, economy pricing, promotional pricing, and marginal pricing. Two companies' pricing strategies amid COVID-19 are compared - a premium tea house and affordable milk tea shop. Objectives are matched with appropriate pricing strategies.

Uploaded by

Cj De las Alas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Torrecampo, Cyrille Kaye S.

Abm 11 Marketing
Principles of Marketing
Week 2
Learning Task 2
Directions: Previously, you were tasked to create a packaging design of your chosen product. This time,
prepare an estimation cost of your chosen product. Write your product cost estimation in your notebook.
Cost Amount Total %
Variable Cost
Direct Labor (Variable) 2,000 40%
Direct Material (Variable) 1,000 20%
Overhead (Semi Variable) 500 3,500 10%
Fixed Cost
Depreciation 20 0%
Rent 1,000 20%
Utilities 500 1,520 10%
Total Production Cost 5,020
Divide: Units Produced 502
Cost per Unit 10

Learning Task 3
Directions: Do the following activities and write your answer in your notebook.
1. Briefly explain the factors you used in setting prices and new product pricing of your chosen product under
Learning Task 2.
Pricing is often one of the most difficult things to get right in business. There are several factors I used
in setting prices and new product pricing of my chosen product. First, is the competitors, a huge impact on
pricing decisions. The relative market shares of competitors influences whether our business can set prices
independently, or whether it has to follow the lead shown by competitors. Second, is the costs, a business
cannot ignore the cost of production or buying a product when it comes to setting a selling price. Third, is the
state of the market for the product because if there is a high demand for the product, but a shortage of supply,
then the business can put prices up. Fourth, is the state of the economy because some products are more
sensitive to changes in unemployment and workers wages than others. Fifth, is the bargaining power of
customers in the target market. An individual consumer has little bargaining power over a supermarket
because an industrial customer that buys substantial quantities of a product from a business may be able to
negotiate lower or special prices. Lastly, is the other elements of the marketing mix because the distribution
channels used will affect price and different prices might be charged for the same product sold direct to
consumers or via intermediaries. The price of a product in the decline stage of its product life-cycle will need to
be lower than when it was first launched.

2. Likewise, enumerate the different pricing approaches you used in pricing strategy.
1. Price Skimming
2. Penetration Pricing
3. Economy Pricing
4. Promotional Pricing
5. Marginal Pricing

This study source was downloaded by 100000794113233 from CourseHero.com on 05-26-2022 06:03:09 GMT -05:00

https://www.coursehero.com/file/99211442/POM-Week-2/
Learning Task 4
Directions: Identify a specific product and service business in the Philippines amidst COVID-19
pandemic. Compare and contrast their pricing strategy used. Show your illustration in your notebook.

Jasmine Teahouse
They combine heavy print advertising with special events and targeted promotions to introduce Simsbury’s
residents and tourists to Jasmine Teahouse, and to premium teas in general. Repeat sales depend on
consistently high quality products and service. They trained every part-time teatender in the proper storage,
brewing, and serving of their 52 kinds of tea.
Their teas and chocolates are offered at a price premium that discourages customers seeking cheap, low-
quality goods. This not only enhances the feeling of prestige customers get when patronizing their teahouse,
but also ensures that customers will have similar expectations of service and quality, based on their socio-
economic class. The status and sophistication indicated by suggesting an outing to Jasmine, or a gift basket
with their logo on it, will soon become valuable in themselves.

My Girl Milk Tea


My Girl milk tea is a widely known milk tea shop in the Philippines. It offers a unique creamy taste that can be
bought in affordable price. The company offers a wide variety of drinks and flavors that can choose and it also
gives a relaxing sip with the good ambiance of the store. The product ranges for about Php 85 to Php 200
depending on size. The business offers different flavors that are in different variety.

Learning Task 5
Direction: Fill out the box with the pricing strategy selection.

Pricing Objectives: Maximum Revenue Maximum Market Maximum Profit Survival


Share
Penetration Pricing Price Skimming Marginal Pricing
Economy Pricing
Pricing Strategy:
Promotional Pricing
Marginal Pricing

This study source was downloaded by 100000794113233 from CourseHero.com on 05-26-2022 06:03:09 GMT -05:00

https://www.coursehero.com/file/99211442/POM-Week-2/
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