A1_Quarter8

A1_Quarter8 - Quarter 8 MKT 450 November 10, 2008 Pricing...

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Quarter 8 MKT 450 November 10, 2008
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Pricing The group predicts for Quarter 8 our competitors will not change their pricing for TST. We came to this conclusion for Company 3 because they increased their pricing to at least cover their break-even point by our estimates. Company 2 is hard for us to analyze because we were unable to evaluate if their earnings per share increased or decreased since the figure was blocked out by stars, meaning too low of a number to display. As part of our ongoing strategy which focuses on higher quality, the group opted to keep prices constant. Thus, for the TST the price for region one is $3,800.00, Region two is $3,600.00, and region three is $3,700.00. For the CVE and SSL products, we are choosing to, also, maintain the same pricing. We feel we are at a price point that allows us to cover production costs and continue to increase market share. Therefore, CVE region one price is $430.00, region two is $430.00, and region three is $430.00. For SSL the prices are as follows: region one- $40.00, region two- $40.00, and region three- $40.00. These prices will cover production costs and will allow us to effectively compete while maintaining our emphasis on quality. Shipments Shipments were calculated by taking the projected forecast and then multiplying by predicted market share. That number was then rounded up to be safe. As mentioned in the past, due to input error in Quarter 1 we remain heavy in TST and, thus, we continue to have TST that was shipped and not sold. Therefore, we continue to not send any TST shipments. We are increasing the number of units shipped of CVE. For CVE we took our projected forecast and multiplied that figure by 45% to result in our ending inventory. We, also, overestimated our figure because we concluded it is much less expensive to 2
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store inventory than to have overtime production. Our shipment rates are 30,000 for regions one, 36,000 for region two and 30,000 for region 3. For SSL we adopted the same philosophy, after multiplying our projected forecast to 50% for region 1, and multiplying by 45% for regions 2 and 3 we arrived at a shipment rate of 250,000 for region 1, 255,000 for region 2, and 200,000 for region 3. These figures were also inflated due to the fact that storing excess inventory will cost the company less than overtime production. Salesforce Based on historical data, it is not necessary to hire sales personnel at this point in the year. However, we are increasing the time allocated for TST and SSL because we intend to increase sales for these products. The TST time allocation is 40% per region. The CVE time allocation is 30% per region, and, the SSL time allocation will increase at
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This note was uploaded on 07/13/2010 for the course MKT MKT 450 taught by Professor Dr.lee during the Fall '08 term at Tampa.

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A1_Quarter8 - Quarter 8 MKT 450 November 10, 2008 Pricing...

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