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Pricing Strategy: High-End Organic Balsamic Vinegars

You have developed a new line of high-end organic balsamic vinegars. Several of your varieties are being used in restaurants in Chicago and have been well accepted by chefs and customers. You have decided to launch the product in both the retail and wholesale markets.

Determine your pricing objectives and develop your pricing strategy. Support your decisions.
Using the following information, apply your strategy and determine your pricing as well as break even in units. Support your decisions.

Costs per 12 oz. Bottle:
Bottle, Label and Production (direct material and labor) $9.12
Advertising & promotion $218,000
Company Overhead $354,000

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Solution Preview

My proposed pricing strategy for this product will be a premium pricing. This product is unique and aimed at high end customers who can afford gourmet food products and will pay a premium for high quality and unique food ingredients. I will start with a premium pricing strategy to reap as much benefit as possible in the initial stages of my launch before competition comes from similar products, as well as to establish my brand as a premium brand in the ...

Solution Summary

Discusses pricing objectives and pricing strategy for High-End Organic Balsamic Vinegars.