What are the non-price attributes of this product

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Reference no: EM132252542

1. Consider the following scenario and answer the questions.

Prices of personal computers continue to drop because of the following conditions:

Increased competition among PC makers, which operate on narrow margins.

Increased consumer knowledge and sophistication, which encourages more consumers to use mail-order discount PC marketers.

Decreased differences in quality and performance among competitors.

Competition from Mac computers.

2. Although Dell prices are still above some of the competitors, all PC manufacturers have been cutting prices to maintain market share.

Do you think Dell should compete through price or nonprice competition? What are the advantages and disadvantages of each approach?

If Dell were to continue competing on price, how might this affect other marketing mix variables?

If Dell drops its prices in the near future, what can you expect other PC makers to do? What kind of competitive situation is the PC industry (oligopoly, monopolistic, pure competition)? What does this imply for price setting?

3. In this chapter, you learned about various pricing concepts that firms consider when choosing a pricing strategy. Using your own perceptions, what considerations would you use in purchasing the following products?

Consider the following products:

A diamond ring

A haircut

Plumbing services

For each product, answer the following questions:

1. What are the non-price attributes of this product?

2. How do these non-price attributes contribute to your perception of the price of the good?

3. How do organizations reinforce the focus on non-price attributes?

3. Explain why optimal profits should occur when marginal cost equals marginal revenue.

4. Chambers Company has just gathered estimates for conducting a break-even analysis for a new product. Variable costs are $7 a unit. The additional plant will cost $48,000. The new product will be charged $18,000 a year for its share of general overhead. Advertising expenditures will be $80,000, and $55,000 will be spent on distribution. If the product sells for $12, what is the break-even point in units? What is the break-even point in dollar sales volume?

5. Describe bundle pricing, and give three examples using different industries.

Reference no: EM132252542

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