Figures Online Action

Chapter 26: Pricing Strategies

Figure 26.1

Build a Better Snowboard
Imagine that you own a company that manufactures and markets snowboards. Using the categories in the example, break down the costs involved in manufacturing a board.

Activity
Prepare a short report or a table chart that answers the following questions: What expenses would fall under the categories of materials, labor, and fixed expenses?

Figure 26.2

Top-of-the-Line Snowboard Markup
Your company’s top-of-the-line snowboard comes with a suggested retail price tag of $199.

Activity
Taking into account a 35 percent retailer markup and a 20 percent wholesaler markup, what is your price to the wholesaler?

Figure 26.3

Entry-Level Snowboard Markup
The base-line cost for producing one of your company’s entry-level snowboards is $27. Assuming 25 percent expense and intended profit, a 20 percent wholesaler markup, and a 65 percent retailer markup, what will the final retail price of the snowboard be?

Figure 26.4

Psychological Pricing
Psychological pricing strategies are some of the most effective techniques available to businesses and are widely used as a result.

Activity
Go through the advertisements in a Sunday newspaper and find one example of each of the four types of psychological pricing strategies. Write a short research report and bring your examples to class.