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All of these questions are answered I just need you to read the answers, understand them and paraphrase them in your own way with keeping the same idea. Just rewrite it with the same idea but in a different phrase than these. Essay Questions: 1. Identify and discuss reasons why firms become so infatuated with pricing. Why is pricing given a great deal of attention? Answer/ ANS: There is no other component of the marketing program that firms become more infatuated with than pricing. There are at least four reasons for the attention given to pricing. First, the revenue equation is pretty simple: Revenue equals the price times quantity sold. There are only two ways for a firm to grow revenue: increase prices or increase the volume of product sold. Rarely can a firm do both simultaneously. Although there are literally hundreds of ways to increase profit by controlling costs and operating expenses, the revenue side has only two variables—one being price and the other being heavily influenced by price. A second reason that firms become enamored with pricing is that it is the easiest of all marketing variables to change. Although changing the product and its distribution or promotion can take months or even years, changes in pricing can be executed immediately in real time. Likewise, product, distribution, or promotion changes can also be quite expensive, especially if research and development (R&D) or production must be rescheduled. Conversely, changing prices is a very low-cost option. The third reason for the importance of pricing is that firms take considerable pains to discover and anticipate the pricing strategies and tactics of other firms. Salespeople learn to read a competitor’s price sheet upside down at a buyer’s desk. Retailers send “secret shoppers” into competitors’ stores to learn what they charge for the same merchandise. In this age of e-commerce, tracking what competitors charge for their goods and services has become so daunting that an entire price-tracking industry has emerged. Finally, pricing is given a great deal of attention because it is considered to be the only real means of differentiation in mature markets plagued by commoditization. When customers see all competing products as offering the same features and benefits, their buying decisions are primarily driven by price. Having a solid understanding of these issues is important because far too many firms and their managers use a seat-of-the-pants approach to pricing by guessing the best price for their goods and services. Guessing is never a good strategy in marketing; it can be downright deadly when it comes to setting prices. 2. In many (if not most) circumstances, cutting prices to increase sales volume is not a good idea. Explain why this is so. What are some alternatives that are preferable to cutting prices? Answer/ ANS: All marketers understand the relationship between price and revenue. However, firms cannot charge high prices without goo.
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Page 72-73 Company’s Objectives/Statement of Mission Many, if not most, successful large companies describe the main goal of their internal planning process as articulating and clarifying their “philosophy” or “mission.” The best, most effective Mission Statements are not mere empty words, but principles and objectives that guide all other aspects and activities of the business. “We are a mission-driven business. We are democratizing organic and fair trade.” Seth Goldman Cofounder, Honest Tea You should be able to sum up the basic objectives and philosophy of your company in just a few sentences. One statement should encapsulate the nature of your business, your business principles, your financial goals, your “corporate culture,” and how you expect to have your company viewed in the marketplace. A Statement of Mission provides focus for your company and should be the defining concept of your business for at least the next few years. It should be the result of a meaningful examination of the foundations of your company, and virtually every word should be important. A finished Mission Statement might be: “AAA, Inc., is a spunky, imaginative food products and service company aimed at offering high-quality, moderately priced, occasionally unusual foods using only natural ingredients. We view ourselves as partners with our customers, our employees, our community, and our environment, and we take personal responsibility in our actions toward each. We aim to become a regionally recognized brand name, capitalizing on the sustained interest in Southwestern and Mexican food. Our goal is moderate growth, annual profitability, and maintaining our sense of humor.” The Statement of Mission worksheet on pages 72–73 helps you outline your company’s objectives. Statement of Mission Describe your company’s philosophy in terms of the areas listed below. · Range/Nature of Products or Services Offered · Quality · Price · Services · Overall Relationship to Customer · Management Style / Relationship to Employees · Nature of Work Environment · Relationship to Rest of Industry · Incorporation of New Technology · Growth/Profitability Goals · Relationship to Community/Environment/Other Social Responsibility Goals · Other Personal/Management Goals Pages 148-149 Risk Every business involves risk. Only the most naive and inexperienced entrepreneurs believe their business “just can’t fail.” Use this section to sit down and think through the various risks facing your new endeavor. This task might seem daunting. So why shake your enthusiasm? Because risk assessment helps you prepare for and prevent threats to your success. If, for instance, you identify a major risk as the possibility that a well- funded competitor will enter the market, you will want to take steps to quickly secure key customer contracts or line up significant funding yourself. Evaluating your risks isn’t meant to be an exercise in fear (although if you are intimidated by the risks ...
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