Pricing Considerations.
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•Select a product on which to focus for this Assignment. It may be a product that is sold by a company you work for or hope to work for.
•Using one of the online calculator tools Retrieved from http://www.calculatorweb.com/calculators/marketingcalc.shtml, calculate the COGS for the product you selected. Keep in mind that the numbers you use will be hypothetical, but be as realistic as possible when producing these estimates. Use the following guidelines: ◦Make an educated guess as to what costs would be involved in producing any given number of the product you selected.
◦Take into account as many costs as you can think of (e.g., manufacturing, shipping, packaging).
•Once you have calculated COGS, decide how much you want to mark up the pricing of your product in order to create the best gross margin, aligning with the price that fits your brand.
•Think about the following considerations related to your product pricing: ◦What is the marketing strategy behind the pricing you decided upon?
◦What is the psychology behind the pricing?
◦How do you predict customers might view the pricing?
Based on the information above, prepare the following:
•Describe the product.
•Outline the cost of goods sold and pricing.
•Explain the marketing strategy behind the pricing.
•Explain the psychology behind the pricing.
•Predict how customers might view the pricing.
•Support your work with specific citations.
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The solution examines pricing considerations.
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Pricing Considerations
•Select a product on which to focus for this Assignment. It may be a product that is sold by a company you work for or hope to work for.
A product I am focusing on for the assignment is 2 Litre Coca-Cola. It is sold by a gas station I work for and has a very high turnover sales rate of about 98% to 100% for each periodic inventory.
•Using one of the online calculator tools Retrieved from http://www.calculatorweb.com/calculators/marketingcalc.shtml, calculate the COGS for the product you selected. Keep in mind that the numbers you use will be hypothetical, but be as realistic as possible when producing these estimates. Use the following guidelines: ◦Make an educated guess as to what costs would be involved in producing any given number of the product you selected.
Cost of Goods Sold for 2 Litre Coca-Cola (COGS) in dollars ($)
Beginning Inventory = 900
Purchases = 300
Ending Inventory = 100
Cost of Goods Sold (COGS) = 1,100
◦Take into account as many costs as you can think of (e.g., manufacturing, shipping, packaging).
The gas station purchases the product in bulk from the manufacturer and receives discounts on high volume purchase. Coca-Cola manufacturing company delivers the product to the gas station and already includes the shipping and packing cost with the discount pricing it charges the gas station for it high volume order of 3,000 of the 2 Litre Coca-Cola per month.
•Once you have calculated COGS, decide how much you want to mark up the pricing of your product in order to create the best gross margin, aligning with the price that fits your ...
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