Performance Running Company is a company specialized in manufacturing running equipment. You are working as a marketing officer with Performance Running Company. You like your job and you adore your "Exceed Running Shoes" which are produced by performance Running Company.

It is spring 2018 and the running season has started, you are willing to capitalize on the good weather and generate sales for your company. You are thinking about the appropriate pricing strategy to market this product. You collected the following data to assist you.

Running shoe's current sale price: $86 per pair.

Direct costs: $40 per pair.

Overhead and indirect costs: $ 4,000,000.

Currently the company sells 280,000 pairs of shoes per year.

This is a normal good.

A change of 10% in price will increase/decrease revenues by 20%.

Competitors on average charge $98 for a similar pair of shoes.

Exceed Running Shoes is a unique product, that offers unique features not available in other products.

You are thinking about the following pricing strategies:

Price Skimming

Psychological pricing (example $99 instead of $100)

Bundle pricing

A pricing strategy of your choice

You're required to analyze the situation and compare and contrast the above-mentioned pricing strategies. Also, analyze each strategy's effect on sales and profits. Finally, you have to select the most appropriate pricing strategy.

(point: you have to make assumptions in order to calculate the revenues and profits under each strategy. State your assumptions clearly)

work area

1Comparing and contrasting the above-mentioned pricing strategies

2Correct calculation of expected revenues and profits under each situation

3Correct analysis of the situation and selection of the appropriate pricing strategy