Performance Indicators

Explain the nature and scope of the pricing function. (Pricing)

a) Price is the value of money placed on a good or service. b) Return on investment- calculation that is used to determine the relative profitability of a product. c) Market share- a firm's percentage of the total sales volume generated by all competitors in a given market.

Explain the selling process. (Selling)

7 steps in the Selling Process 1. Approach the Customer - Greet the customer 2. Determining needs - Learning what the customer is looking for in order to decide what products to show and which product features to present first in the next step of the sale 3. Presenting the product - Educate the customer about the product's features and benefits (feature benefit chart) 4. Overcoming objections - learning why the customer is reluctant to buy, providing information to remove that uncertainty and helping to customer to make a satisfying buying decision 5. Closing the sale - Getting the customer's positive agreement to buy 6. Suggestion selling - suggesting additional merchandise or services that will save your customer money or help your customer enjoy the original purchase 7. Relationship building - creating a means of maintaining contact with the customer after the sale is completed

Explain the nature of environmental regulations

Almost every aspect of life in the United States is touched by environmental regulations. Drinking water must meet state and federal quality standards before it may be consumed by the public. Car manufacturers must comply with emissions standards to protect air quality. State and federal regulations govern the manufacture, storage, transportation, and disposal of the hazardous chemicals used to make deodorants, hair sprays, perfumes, jewelry, fertilizers, pesticides, cleansers, batteries, and a variety of other common goods and products.

Explain the concept of competition.

As you know, we're in a highly competitive industry. In order to gain more market share, we must constantly promote to potential customers. Price competition is one strategy we've accomplished with the loss leader on hosting. Our expertise may be another message we advertise to put us head and shoulders above our competition.

discuss the nature of environmental law.

Before we present our publicity campaign ideas we feel it is important to discuss the nature of environmental law. Stated briefly, environmental law is a network of treaties, conventions, statutes, regulations, and law that aim to regulate the interaction of humans with the environment. Environmental law encompasses such an immense area that laws often overlap.

Which defining remark best relates the key terms and/or concept to the case for the KPI, discuss the role of ethics in operations.

Ethics examines questions of moral right and wrong arising in the context of business practice or theory. It includes the written and unwritten codes of principles and values that govern decisions and actions within a company. The nature of a company's operations ethics will determine how others view your company and directly impacts your public image, sales, customer perceptions, and employee relations. The ethical, or right thing to do, is to alter your company's operations. Instituting safer, environmentally friendly disposal methods will counteract the negative publicity you have been receiving.

Explain factors affecting pricing decisions. (Pricing)

Internal Factors - result of company decisions and actions. To a large extent these factors are controllable by the company and, if necessary, can be altered. quick change is not always realistic. EX) product pricing may depend heavily on the productivity of a manufacturing facility (e.g., how much can be produced within a certain period of time). The marketer knows that increasing productivity can reduce the cost of producing each product and thus allow the marketer to potentially lower the product's price. But increasing productivity may require major changes at the manufacturing facility that will take time (not to mention be costly) and will not translate into lower price products for a considerable period of time. External Factors - There are a number of influencing factors which are not controlled by the company but will impact pricing decisions. Understanding these factors requires the marketer conduct research to monitor what is happening in each market the company serves since the effect of these factors can vary by market.

Describe the role of business ethics in pricing. (Pricing)

Pricing Ethics Pricing ethics involves examining what constraints are needed on the pursuit of market share and profits when the actions of a company affect others adversely. For example, a company that has a monopoly on a particular product with few, if any, direct competitors needs to think carefully about raising prices if the price change can not be justified. Justification may be an increase in labor or material costs that can be demonstrated clearly to customers. Examples of Unethical Pricing Strategies Price gouging is an example of an unethical pricing strategy. A company may raise prices of items that are temporarily in high demand. This is sometimes seen in the wake of emergency situations when the price of plywood jumps after a flood, even though there is enough plywood to repair houses. Predatory pricing, on the other hand, involves pricing a product low enough to dampen demand. This type of pricing is typically used to end a competitive threat. The company lowering the price is operating to protect market share from moving to the competition. High Pressure Pricing Strategies Vulnerable consumer groups sometimes take the brunt of unethical pricing strategies. "Bait and switch" selling attracts consumers to a low-priced item then uses high pressure tactics to get them to switch to a higher priced item. Selling counterfeit goods, such as watches, handbags and designer athletic shoes at the same high price as the "real" goods, is another example of an unethical strategy. Developing an Ethical Pricing Strategy The Institute of Business Ethics suggests that companies issue statements of ethical practice in regard to their dealings with customers. This includes pricing and should include statements about when the company can raise prices and by how much, how pricing should be communicated to the consumer and the company's pledge to follow all applicable pricing laws. The ethical pricing statement should be reviewed periodically to ensure guidelines are followed. Business ethics in pricing is based on the choice of doing what is right as it relates to consumer rights. Without thorough research, many consumers do not know the exact value of many products or services. For this reason, businesses should be ethical in their pricing strategies so they don't exploit the consumers' lack of knowledge. For businesses to be ethical, they should be transparent, honest, and responsible for their actions. I understand your concerns. Loss leader pricing may seem unethical to some, but it is by no means illegal, nor is it unethical. It is simply a pricing strategy. Loss leader pricing does not force a customer to purchase a product; it only attracts them to take a serious look at our company's offerings.

Explain the effect of pricing on promotional activities. (Pricing)

Pricing is an activity done by a business to determine a selling price. Promotional activities include advertising, personal selling, public relations and sales promotion. Various promotional activities may effect pricing and likewise. The purpose of many promotions is to attract customers and if that promotion is tied to any type of discount, the price will be effected. For example, if a sale is being promoted, then the price will be reduced for a specific period of time, or may only be available with the use of a coupon or BOGO offer.

Explain the nature of product/service bundling.

The basic nature of product bundling involves the willingness of a supplier or vendor to provide two or more services to a customer for basic rate. This rate normally provides significant savings over purchasing the products individually.

demonstrate responsible behavior.

The company could demonstrate responsible behavior by putting an end to current disposal methods and immediately instituting safer containment measures.

Describe the impact of loss leader pricing on promotional activities. (Pricing)

The loss leader pricing strategy is used when a product is priced so low that it is sold at a loss. This pricing strategy will have a huge impact on promotional activities and requires coordination of all advertising. The loss leader is used to attract customers with the hope they will buy other items or services along with the loss leader item. Using loss leader pricing has the ability to gain market share and increase the profit from other items. Once loss leader pricing is decided on, the promotional activity of advertising must support it to be effective.

Evaluate pricing decisions. (Pricing)

When evaluating this pricing strategy we found it resulted in increased profits and satisfied customers. By putting a loss leader price on the web hosting, we have increased the number of customers by 18%. Using this strategy was successful. Evaluating this pricing outcome can help us make the decision regarding the success of loss leader pricing; we should continue using this strategy in the future

Explain legal considerations for pricing. (Pricing)

a) Price fixing- competitors agree on certain price ranges within which they set their own price b) Price discrimination- a firm charges different prices to similar customers in similar situations. c) Unit pricing- allows consumers to compare prices in relation to a standard unit or measure. d) Price advertising- FTC's price advertising forbid a company to advertise a price reduction unless the original price was offered to the public on a regular basis.

Explain the use of technology in the pricing function. (Pricing)

registers, bar codes, computers software to find the competitions pricing to price effectively