Assessing Wm Wrigley Jr Company (Gum)
1) Price Setting: How will you set your price(s)?
2) Will you use Temporary Price Promotions?
3) What will your expected profits be? Show calculations for expected profits over a reasonable time period.
Setting prices and creating a successful marketing mix on products being sold to customers can be a tricky situation. If a company puts too high of a price tag on its product then there is the chance that the consumer will not purchase the product. If the product has too low of a price then there is a chance that consumers will buy the product but that the company will lose profits because the prices charged do not cover overhead expenses, which could be the company's demise. Creating a price structure that accounts for both internal and external factors like - covering overhead expenses, is in comparison with the competition and offers the company profitable revenues is a good way to set the pricing on a product which would be determined by an organizations objectives and overall strategies. "Pricing strategies have to support a firm's objectives and overall strategies" (Blois, et. al., 2000, p. 212) Understanding the implications of pricing structures on the organization is crucial to leaders and the whole company's future.
"Recognizing the broad implications of pricing is crucial to managers facing the pricing decision. First, decision-makers have to account for eventual disparities between real and perceived prices in targeted customer segments. Also, setting prices may not be restricted to determining the number of monetary units to be paid for one unit of product at the time of purchase. It may encompass the specification of 'purchase and use conditions' associated with monetary price, over ...
The solution discusses the Wrigley price setting, temporary promotions and expected profits.