To answer second question use the following formulas: a. Dealer Invoice= MSRP-Dealer Discount b.Gross Margin= Dealer Invoice- Variable Cost c. Gross Margin%= Gross Margin/Dealer Invoice%

Pricing and Margins Pricing is one of the most complex decisions in marketing because it requires balancing multiple objectives: 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 vehicle in the following table, calculate the dealer invoice, the unit margin, and the gross margin as a percentage of revenue (dealer invoice). Vehicle X Vehicle Y MSRP $16,999 $21,999 Dealer Discount 8% 12% Variable Cost $11,474 $14,819 Dealer Invoice Gross Margin Gross Margin %