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Tetpack Nigerian Limited (TNL) produces various types of packaging products for the food industry. TNL has just introduced a new type of pack, and its marketing manager is considering how to penetrate the market with the pack. The following pricing strategies have been suggested:
i. Market skimming price
ii. Market penetration price
iii. Full cost plus price
iv. Return on investment price
v. Marginal cost plus price
The management accountant has provided the following data about the pack:
Required:
a. Discuss the above pricing methods and advise when each could be used. (10 Marks)
b. Calculate what the price of the pack should be if its price is based on:
i. Full cost plus pricing (1½ Marks)
ii. Marginal cost plus pricing (1½ Marks)
iii. Return on investment pricing (2 Marks)
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Ben John (BJ) Limited produces light fittings, known for their constant design innovation and short product market life cycle. The company launched the new product using a market skimming pricing policy. Explain, with reasons, the likely changes that will occur in the unit selling price and unit production costs of the product as it moves through each of the four stages of its product life cycle:
a. Introduction;
b. Growth;
c. Maturity;
d. Decline.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Tetpack Nigerian Limited (TNL) produces various types of packaging products for the food industry. TNL has just introduced a new type of pack, and its marketing manager is considering how to penetrate the market with the pack. The following pricing strategies have been suggested:
i. Market skimming price
ii. Market penetration price
iii. Full cost plus price
iv. Return on investment price
v. Marginal cost plus price
The management accountant has provided the following data about the pack:
Required:
a. Discuss the above pricing methods and advise when each could be used. (10 Marks)
b. Calculate what the price of the pack should be if its price is based on:
i. Full cost plus pricing (1½ Marks)
ii. Marginal cost plus pricing (1½ Marks)
iii. Return on investment pricing (2 Marks)
Find Related Questions by Tags, levels, etc.
Ben John (BJ) Limited produces light fittings, known for their constant design innovation and short product market life cycle. The company launched the new product using a market skimming pricing policy. Explain, with reasons, the likely changes that will occur in the unit selling price and unit production costs of the product as it moves through each of the four stages of its product life cycle:
a. Introduction;
b. Growth;
c. Maturity;
d. Decline.
Find Related Questions by Tags, levels, etc.
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