ACC501 SLP MOD 1: Understanding The Brand Awareness And Competition

ACC501 SLP MOD 1
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The proposed products are the new pens and the analysis of costs and sales revenue show they are a viable option in the market. The special pricing strategy is most common when customers are willing to pay more for products and there are no substitutes and firms can charge higher prices to maximize profits. Determining the most appropriate price is important since when the price high or too low for this may affect affects sales revenue negatively in the target market (Schwartz, Carew & Maksimenko, 2011). Understanding the brand awareness and competition helps to identify the most effective strategies to ensure growth and support competitiveness. Systematic analysis of the relationships between sales prices, costs, sales, and production volume helps to set the prices expenses and profits.
Most pens cost $1 to $ 4 and the proposed price ceiling and for the GM Pens the cost is $2. Analysis on effect of changes in the structure of costs or expenses and sales volumes helps to determine profitability. Since profitability depends on the ability to increase the sales revenue and reduce the costs, the pricing strategies focus on increasing the market share and maintaining competitiveness. Lowering the price is considered to enter new markets and attract more customers, based on the observation that customers have different products to choose from even as such the pens use inks.
The contribution margin is the difference of income from sales over variable costs and is useful to determine the relationship between costs, volume and profit. The concept of contribution margin is useful in business planning because it helps to determine the pr...