Marketing and the competitive environment – 2 . 17 Making use of the marketing combine: pricing – Mark Structure
1Calculate the percentage mark-up usually total costs per customer visit with a typical spend of £20. 00(4 marks)
Common total costs are£675 500 =£19. up to 29 (1 mark)
£19. 29 to £20. 00 is known as a difference of £0. 71.
So mark-up is£0. 71 (1 mark)× 100 = 3. 68% (1 mark)
£19. up to 29 (1 mark)
2Calculate the modern revenue approximate for the retail outlet in the event spend every customer go to is elevated to £25. 00. (8 marks)
PED is% change in demand(1 tag for formula)
% difference in price
% change in price are (£20-£25) times 100 = 25%
PED is% difference in demand=-0. six (1 mark)
25 (1 mark)
So %change in demand=-0. 6th × twenty-five (1 mark)=15% (1 mark)
Thus require will decrease by 15%35 000 × 0. eighty five (1 mark)=29 750 (1 mark)
Earnings will as a result be29 750 × £25. 00=£743 760 (1 mark)
3Analyse two disadvantages of using penetration pricing to aid establish the retail outlet.
Good application AND Good analysis
Good program AND Affordable analysis
Good analysis AND Affordable application
Fair application AND Reasonable evaluation
Knowledge AND Reasonable app
Know-how AND Fair analysis
Classification; penetration costs is the placing of a low initial value for a cool product in order to get a foothold on the market and gain market share
Likely themes intended for application:
Choccy Delights USP is one among high quality, making use of this strategy will undermine this. Might be viewed as cheapening the product
This would reduce the margin of safety by 5000 client visits, affordable prices would reduce this physique by elevating the break-even point A PED of -0. six suggests higher prices...
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