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Scenarios
How Much Does This Actually Cost to Make
Name That Strategy
100
It costs you $50 to make a cell phone. If you want to make a $65 profit on each phone, how much should you sell it for?
$115
100
How much do you think an iPhone 6 actually costs to make?
$200.10 Costs: $700+
100
Set a price to meet your competitors
Competitive-Based Pricing
200
If it costs Honda $12,347 to manufacture a car, and they sell it for $25,986, what is their profit?
$13,639
200
How much do you think Jordans actually cost to make?
$16 Costs: $300+
200
The use of coupons, seasonal price reductions during the holidays e.t.c. to increase sales
Temporary Discount
300
If a company is charging $20 for a shirt, and they see that all of their competitors are charging $30 for the same shirt, should they raise, lower, or keep their price the same? Why?
They should keep it the same because if competitors are charging more for the same shirt, more customers will come to your store to buy the shirt because it costs less.
300
How much do you think Beats by Dre cost to make?
$14 Costs: $200+
300
Set a price based on the growth/decline of the product/service
Product Life Cycle Pricing
400
If it costs $237.40 to make a Gucci purse, and Gucci sells the purse for $1,200, how much profit do they get?
$962.60
400
How much do you think it costs to make a penny?
$0.02 Worth: $0.01
400
Set the prices high to quickly recover expenditures for advertising and production
Price Skimming
500
If an iPhone costs $150 to make, and your 5 employees spend 3 hours making it at $11.50 per hour, and you want to make a profit of $300, how much should you charge for the iPhone?
Charge $622.50 150+(5(3x11.50))+300 150+(5x34.50)+300 150+172.50+300 622.50
500
How much do you think Christian Louboutin high heel shoes cost to make?
$70 Costs: $800+
500
Set a low price for a product/service in hopes of building market share
Penetration Pricing