Challenges in setting prices the first time
When a company introduces a new product, it is faced with the challenge of setting a price. The main areas of concern is whether the price the price is affordable, whether it meets the costs incurred to produce it, the market share that the price will help the product gain etc
The challenges in setting initial prices are:-
(i) Cost coverage
Whether the price will cover all the direct and indirect unit costs is always an issue.
(ii) Clientele targeted
Whether the price is affordable for the clientele targeted is always a question to the marketers.
Pricing strategies for New Products are two i.e. Market penetration and Market Skimming
Market penetration pricing
This involves setting a low initial price to enter the market quickly and deeply, attract a large number of buyers and win a large market share. Benefits are
It will discourage new entrants to the market
Shorten the introductory stage of the product’s life cycle
Production costs will fall as sales volume increases allowing for further price reductions if needed.
Market Skimming Pricing
This refers to setting initially high prices and spending heavily on advertising and promotion to obtain sales. As the product moves ages the price will be lowered. The aim is to gain high unit profits early in the product’s life cycle. Skimming is a profit maximization strategy.
Kavungya answered the question on April 29, 2021 at 09:51
-
Samson Kimani was recently appointed as the finance manager of Bita Chemicals Ltd. He qualified as an accountant one year ago and this is his...
(Solved)
Samson Kimani was recently appointed as the finance manager of Bita Chemicals Ltd. He qualified as an accountant one year ago and this is his first managerial position. The finance department is made up of ten members of staff who have been working for the company for several years but since they are not qualified accountants, they were not considered when the appointment was being done. Members of the department are not happy with the appointment as they would have liked someone who has been with the organization for a longer duration and therefore with more experience to have been promoted to that position.
Although Samson is a good accountant, he has a problem relating to people. Consequently, there has been little social contact between him and members of his department.
To overcome his communication problems, Samson has been relying on internal memoranda and placing instructions on the department’s notice board as the main methods of conveying information to his staff. These new methods of communication have not been well received by the staff and have resulted in several complaints being made to the chief finance officer regarding Samson’s inability to effectively communicate with his staff. There has also been a lot of confusion within the department and team spirit is at an all time low.
The chief finance officer has talked to Samson and was able to establish the following as the reasons for Samson’s reliance on written communication only:
To avoid confusion since there is a documented record of his instructions.
When chairing departmental meetings he feels intimidated with so many experienced and older employees and as a result the meetings always end in chaos with no decisions being made.
As a manager in a consultancy firm, you have been approached by the chief finance officer to help Samson improve on his communication skills.
Required:
(a) Explain to Samson why he should use different styles of communication to improve the working relations in his department.
(b) Outline to Samson the guidelines of conducting effective meetings with members of his department.
Date posted:
April 29, 2021
.
Answers (1)
-
Quality management is an important strategic issue in an organization. Discus.
(Solved)
Quality management is an important strategic issue in an organization. Discus.
Date posted:
April 29, 2021
.
Answers (1)
-
Show how delegation of authority in an organization is influenced by the following factors:
a)Chain of command
b)Unity of command
c)Span of control
d)Line and staff relationship
(Solved)
Show how delegation of authority in an organization is influenced by the following factors:
a)Chain of command
b)Unity of command
c)Span of control
d)Line and staff relationship
Date posted:
April 29, 2021
.
Answers (1)
-
“For any manager to be effective in the change process, he must own the process”
Discuss this statement with regard to a manger as an agent...
(Solved)
“For any manager to be effective in the change process, he must own the process”
Discuss this statement with regard to a manger as an agent of change.
Date posted:
April 29, 2021
.
Answers (1)
-
What criteria can an organization use for allocating resources to different departments?
(Solved)
What criteria can an organization use for allocating resources to different departments?
Date posted:
April 28, 2021
.
Answers (1)
-
Effective allocation of the resources of the organization is essential for strategy implementation. Discuss.
(Solved)
Effective allocation of the resources of the organization is essential for strategy implementation. Discuss.
Date posted:
April 28, 2021
.
Answers (1)
-
Describe the basis upon which consumer markets could be segmented, highlighting the reasons
(Solved)
Describe the basis upon which consumer markets could be segmented, highlighting the reasons
Date posted:
April 28, 2021
.
Answers (1)
-
Differentiate between consumer markets and industrial markets
(Solved)
Differentiate between consumer markets and industrial markets
Date posted:
April 28, 2021
.
Answers (1)
-
One of the departments of Block Industries Ltd. is headed by a manager who is responsible for approximately 50 professionally qualified staff, plus ancillary workers....
(Solved)
One of the departments of Block Industries Ltd. is headed by a manager who is responsible for approximately 50 professionally qualified staff, plus ancillary workers. Section heads look after groups of between four and seven members of staff.
The previous manager was keen, understanding and strict; he closely observed performance, weaknesses and strengths of each staff member. He commended what he observed.
The services offered by Block Industries Ltd were efficient and highly regarded. Staff used to take part in many discretionary activities such as involvement in public affairs and voluntary unpaid overtime work.
A year ago, a new manager was appointed. The new manager, trained in a famous business school, appears to be cold and aloof. He immediately promoted two section heads to be assistant managers, one in charge of public relations, the other in charge of administration to be responsible for the newly introduced weekly performance reports and briefing meetings.
Since the appointment of the new manager, 30% of the staff have left the organization and the rest have gradually ceased all their discretionary activities. There is now a policy of positive non co-operation adopted by employees.
Required:
a) In you own words, briefly analyze the human resources problems facing Block Industries Ltd.
b) Identify five causes that might have led to the prevailing situation and suggest the ways in which the situation can be corrected.
Date posted:
April 28, 2021
.
Answers (1)
-
Business process re-engineering affects the way in which work is undertaken in an organization.
Explain this effect as it relates to:
a) Employees’ behaviour.
b) Work structure.
(Solved)
Business process re-engineering affects the way in which work is undertaken in an organization.
Explain this effect as it relates to:
a) Employees’ behaviour.
b) Work structure.
Date posted:
April 28, 2021
.
Answers (1)
-
Identify five environmental factors that affect business and explain the way in which each factor influences the marketing mix of an organization.
(Solved)
Identify five environmental factors that affect business and explain the way in which each factor influences the marketing mix of an organization.
Date posted:
April 28, 2021
.
Answers (1)
-
The organization for which you work wishes to develop a quality control programme. As the production manager, the director has requested you to develop the...
(Solved)
The organization for which you work wishes to develop a quality control programme. As the production manager, the director has requested you to develop the programme.
Explain the steps you would follow in developing the quality control programme for your
organization.
Date posted:
April 28, 2021
.
Answers (1)
-
Explain the factors to be considered when purchasing materials for an organization.
(Solved)
Explain the factors to be considered when purchasing materials for an organization.
Date posted:
April 28, 2021
.
Answers (1)
-
Describe the steps to be followed in a materials purchasing procedure.
(Solved)
Describe the steps to be followed in a materials purchasing procedure.
Date posted:
April 28, 2021
.
Answers (1)
-
What factors may limit the effectiveness of a performance appraisal system
(Solved)
What factors may limit the effectiveness of a performance appraisal system
Date posted:
April 28, 2021
.
Answers (1)
-
Explain the measures that management should take to improve the ethical behaviour of employees.
(Solved)
Explain the measures that management should take to improve the ethical behaviour of employees.
Date posted:
April 28, 2021
.
Answers (1)
-
Citing examples where appropriate, describe the indicators which show whether a manager is behaving ethically or not.
(Solved)
Citing examples where appropriate, describe the indicators which show whether a manager is behaving ethically or not.
Date posted:
April 28, 2021
.
Answers (1)
-
Explain the meaning of the term “management ethics”.
(Solved)
Explain the meaning of the term “management ethics”.
Date posted:
April 28, 2021
.
Answers (1)
-
ABC Ltd. is a profitable manufacturing company with a good track record of continuous growth over the last decade. The general business environment is rapidly...
(Solved)
ABC Ltd. is a profitable manufacturing company with a good track record of continuous growth over the last decade. The general business environment is rapidly changing with the introduction of new manufacturing processes and market liberalization in the region.
The board has appointed a new managing director who is anxious to create a momentum for innovation and change in the organization. He is aware that introducing change is relatively easy when a company is facing a crisis but far more difficult when all is well. As a business development manager in ABC Ltd., the director has asked you for advice.
Prepare a memorandum to the managing director in which you discuss:
a) The organizational life cycle concept in relation to the difficulties of introducing innovation and change in a successful organization.
b) How the company may stimulate a pro-change culture in the organization.
Date posted:
April 28, 2021
.
Answers (1)
-
What benefits may accrue to an organization from instituting decision support systems?
(Solved)
What benefits may accrue to an organization from instituting decision support systems?
Date posted:
April 28, 2021
.
Answers (1)