Drucker Seven Deadly Sins: Target Costing vs Market Pricing
Not what you're looking for?
Drucker argues that one of the seven deadly business sins is to base prices on costs, which means first measuring the current cost of a product or service and then "marking it up" by adding a profit margin. He blames the disappearance of the US consumer-electronics industry in part on its practice of basing prices on costs. Can a domestic industry disappear because of its pricing practice? What is an alternative to basing prices on costs? What does this alternative require that is different from basing prices on costs?
Purchase this Solution
Solution Summary
Your tutorial is brief, 149 words, and explains that product can be extinguished by poor pricing and explains the alternative.
Solution Preview
Yes, pricing can cause a product to disappear. If you price your product too high customers may not want it, even if there are no substitutes. Of course if there is demand but the price is too high, competitors will either undercut ...
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
Recent Feedback
- "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
- "Thank, this is more clear to me now."
- "Awesome job! "
- "ty"
- "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Introduction to Finance
This quiz test introductory finance topics.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.