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As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what
As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company:
At Bella Computers, Emily has discovered that the company earned a percent return on investment this year and wants to increase thisto percent next year. To its retailer customers, Bella Computers gives cash discount terms of net It also gives retailers a percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople percentof the sale price for each Bella Computer they sell.
At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected.
Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an percentdiscount if their purchases exceed $ a year.
Jack's OneHour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get at least percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers percentdiscounts on any order over $
National Printing Equipment NPE produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new productthe Gutenberg NPwith some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. Regarding freight charges for its equipment, NPE's invoice reads, "Seller pays the cost of loading equipment onto a common carrier. At the point of loading, title to such products passes to the buyer, who assumes responsibility for damage in transit, except as covered by the transportation agency."
National Printing Equipment ships its products
Question options:
based on freightabsorption pricing.
using uniform delivered pricing.
FOB shipping point.
FOB buyer's factory.
at no cost to the customer.
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