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Typed; Times New Roman 12 font, double spacing, 1″ margin
Submission link: use the link attached in this assignment thread or under “Individual Assignments” navigation tool on the left side of Blackboard.
References: If you have used any sources for this assignment, you should cite them in your paper; use APA format.
Note: save your file as “your last name_Chapter 18” (e.g., Jackson_Chapter 18) before the submission.
After reading chapter 18, you will submit your answers for the questions as following:
1. Give an example of each of the major categories of pricing objectives.
** Pricing objectives can be classified into four major groups: (1) profitability objectives, (2) volume objectives, (3) meeting competition objectives, and (4) prestige objectives. All companies must consider objectives of one kind or another when developing pricing strategies
2. How can locating the breakeven point assist in price determination?
3. How do pricing objectives for a global firm differ from those used generally?
4. Critical Thinking Exercise: Price Elasticity
Exercise: Do you drink coffee? Which category are you in? light (less than 1 cup per day), medium (1 to 2 cups per day), heavy (more than 2 cups per day), or non-coffee drinkers?
Scenario: The price of coffee in all of its forms (from prepared drinks at Starbucks to whole beans at the grocery store) has suddenly doubled. What will you do? How (if at all) will your coffee-drinking habits change? What factors will influence you? Consider the influence of the following factors:
Why do you drink coffee? For the taste? To socialize? For the caffeine?
What portion of your discretionary income do you currently spend on coffee? How would that change with the price increase?
How would your friends/families influence you?
Are appealing substitutes (e.g. tea, soda) easily available?
Would timing of the price increase change your responses? (e.g. during final exam week versus during summer vacation)
How does the concept of price elasticity relate to pricing and revenue?
How can you determine the elasticity of a given category?