Pricing / Margin Assignment Pricing is one of the most complex decisions in marketing because it requires balancing multiple objectives, including cost/margin, positioning in the mind of the consumer, impact on channel/distribution partners, and competition. This assignment is designed to illustrate the effects of the pricing decision in these different contexts. 1. What is the role of MSRP in your pricing decision? 2. For each brand in the following table calculate the manufacturer's selling price (MSP), the per unit margin, and the gross margin as a percentage of MSP. Brand X Brand Y MSRP $5.29 $4,99 Volume Discount 30% 35% Promotion Allowance 15% 12% Unit Cost $1.18 $0.74 MSP Per Unit Margin Gross Margin % 3. For large retailers, the MSP represents their product cost, which they will mark up to set the retail price. If the retailer has a target margin of 25%, what would the retail prices be for the brands in question 2? Brand X Retail Price= Brand Y Retail Price = 4. Many small retailers will buy through a wholesaler instead of buying direct from the manufacturer. Given the pricing policy for Brand X in question 2, what would be the wholesaler's selling price (WSP) if the wholesaler has a desired margin of 15%? If the retailer has a desired margin of 30%, what would the retail price be? What volume discount would the manufacturer have to offer for the retailer to price at MSRP] WSP = Retail Price = Vol. Discount =