On your grocery…………the price elasticity of demand?

Ans. price elasticity means that the change in price will affect the demand of the products that are directly related to price of one product. When the price of spaghetti going to increase 50% then the demand of the entire product related to spaghetti going to decrease because due to increase in price the demand of spaghetti going to decrease that is also mention by the price elasticity of demand rule.  Price elasticity is indirect proportion of the demand as increase in price decrease in the demand and decrease in price automatically increases the demand. So due top increase in the price of spaghetti its demand going to decrease and this decrease also affect the demand of spaghetti sauce, rice and parmesan cheese. This rule is applicable in every part of life.

1.      Has the internet……………………………….justify your answer.

Ans. yes the internet is going to provide help for customers that many merchandise are going to low down their prices because a tough competition is going to start online that many merchandisers are going to sell their products and a large competition environment is going to develop on the internet and customers only attract that website of merchandise that offer most reasonable prices of its product because customers have more than one choices on the internet and the quality of products are very good so merchandise want that customer only purchase their product that’s why they try to minimize the price it this extent that they can cover their cost and give them some profit margin with strong customer relationship in long term for making  good reputation of the website.

2.      Imagine that a pharmaceutical……………………choosing a price.

Ans. price inelastic means that the price is not belong to any thing while its setting and the price can be change by the merchandiser at any time according to their own requirement. In this scenario, pharmaceutical company is the one who is going to introduce the disease cure which will help the people to remove this disease with proper medication so the company is the single seller of that cure in the market and those who want to purchase that cure must be purchase from the company at the price which is set by the company, company is the single seller and no any other competitor is present so the price of medicine is set by the company according to own requirement and no any negotiation can be implemented because the price set  by the management of the company as per their own demands and customer has to pay that price.

Chapter 15:

1.      Some high fashion retailers,……………………………………which suit o buy?

Ans. there are two different approached of value based are going to presented. The one is the reasonable price with low quality and the second is the high prices with high quality. In first approach, the value is going to presented in this sense that current requirement of customer is going to solve and they have to pay only few amount this will also help customer to provide them ready to wear dress and in the next approach explain that the high quality product also change high rates but they can be used in long terms and never going to waste the product. so according to this discussion, the  lower price suit can be buy because it can utilize quickly and solve the problem of customer in less time period.

2.      Identify two stores at which……..answers that customer.

Ans. the two stores are grocery and cloths from where we are shopping. the prices of grocery store is always almost low because at every time the large number of people come here and purchase their product of daily usage and they also offer very low prices so every can afford the products of daily use. The cloth stores are very selective customers and they can pay for their dresses all the prices. So the cloth store using high low pricing strategy that provide them benefit in the season and in off season, the selling is going down where as the customer of grocery store are regular and they can bear the prices that ‘why they are going to purchase that product every time.

3.      As the product manager…………………………..justify your answer.

Ans. in the current strategy, the company has to follow the skimming pricing strategy because they only one who are going to introduce this latest technology and their competitors can never copy this new technology so the company use skimming because only selective buyers can come And purchase such machine and company is going to charge a high price because the willing customers can purchase the machine and they can pay a high price of machine because only those persons can purchase such machine that must be very keen to wash the cloths and they want to maintain their cleaning and can pay huge amount for machine. So skimming pricing strategy can be beneficial for the company and they can generate more money by using this strategy. 

4.      Coupons and rebates…………………………………..and a consumer and why?

Ans. coupons and rebate has different benefits that give many advantages to manufacturer, retailer or customer. As a manufacturer, the coupon give them benefit in such a way that their sales going to high so they can produce more and more products. As a retailer, the coupon has given no additional benefit because the limited prices on sale are sometime giving the company a tough time. A consumer feels very happy by getting coupon and can purchase any thing at any time. Rebate is some kind of sales promotion that makes attractive the sale of product and it is beneficial for customers, manufacturers and also for retailers. These both are good for the business point of view but have different effects on all the related bodies like manufacturer, customer and retailers.

5.      You have been hire for………………………………..customers, stockholders and vendors?

Ans. yes firm can try to pay the slotting fee because they want to present their products in front of people and they attract them so that they want to present their goods more clearly. Yes our company is also charge the slotting fee because it is consider that for presentation, the fee must be given which also capture more customers and increase its sales. But maybe this type of fee may consider a burden for the vendors, stockholders, customers and shareholders. But the slotting fee must be reasonable because there are many companies who want to present their products but have no additional  budget to pay such fees because this would be consider an additional expense for the company they try to overcome this expense with different methods.