Based on the information given in the case study and Kraljic Portfolio Purchasing Model, archival storage services would be classified as a routine item since has low profit impact and low supply risk, and the marketing paper would be classified as a leverage item because it has high profit impact with low supply risk. More Suitable Product for the E-Auction
Microeconomic theory specifies that economic agents (mainly consumers) aim at maximizing utility given that they operate a fixed budget. Under the condition of utility-maximizing subject to fixed budget, the consumer must choose a commodity that best gives him the highest satisfaction. Economists rely on the concept of preferences and utility-maximization models to explain WTP. Conversely, people are able to buy fewer products if their income decreases or the price of goods increases. Yet as a general principle, people tend to buy goods and services that offer them the highest utility, or satisfaction, per dollar spent.
It has been observed that, impulse purchases of hedonic products are more than functional products, because, hedonic products conveys some symbolic benefits. b. Product Price: Wong and Zhou in 2003, observed and subsequently established that product pricing is a major driver factor of impulse purchases. Consumers, tends to purchase more, when there is a price discount or a product discount. Consumers, also tends to make impulse purchases, of planned utilitarian products, when they are at a discount, by preponing their
In fact they are quite costly, so the parties involved will take into account how much they value the activity they are doing, from an efficiency economic view. What Coase points out is that externalities are reciprocal, so they do not depend only on one of the parties like Pigou would say. As a result, a possible agreement between Eddie and Lucille will depend on the legal rule in place, or in other words, on which one resides the liability. Thus, the negotiation would tend to favor one of the parties, but the interest of bargaining would find its reason in knowing that the result of the negotiation – the market transactions – would be better than the possible result of the court
After developing a pricing strategy, then begins the process of marketing of the product. They are both vital in topping up the sales. It is also important to identify what kind of product to sell in order to determine the type of business. The first type of business is volume driven where prices can be manipulated up and down. Questions are asked whether
If the change in quantity demanded is greater the change in price, the good is price elastic in nature. If the change in quantity demanded is lesser than the change in price, the good is price inelastic in nature. It is measured by the formula:- PED= (%of change in good X demanded)/ (%of change in price of good X) Price Elastic products include goods which have a large number of subsidies in the market, giving the customer more power to choose any firm based on the different prices. Price Inelastic products are goods which are unique in nature and are generally produced by very few firms. Customers don’t have much power and are compelled to buy in the give price.
The customer’s demand is expressed as a function of time, price and credit period which is appropriate for the products for which demand increases initially and after sometime it starts to decrease. In order to reduce the holding cost of supplier, the production is considered as one of the decision variable, which is directly proportional to the customer’s demand rate. The aim of this paper is to maximize the joint profit for supplier and retailer. Some numerical examples are demonstrated for validation of the developed mathematical model. Finally, implementing sensitivity analysis on the decision variables by varying the inventory parameters, effective managerial insight are generated which is beneficial for players of supply chain.
Consumers buy things according to their purchasing power and their preferences. There are various pricing techniques which sellers use to maximize consumer utility and to gain as much profit as possible. Talking about The psychological pricing techniques used by sellers, These strategies make the price more attractive and the strategy is not to lower the prices but is related to the emotions of the consumers. Various psychological pricing strategies are odd even pricing, prestige pricing, multiple pricing, bundle pricing and promotional pricing. A lot of retail stores use these kinds of pricing strategies as they provide a platform to emotional consumers rather than rational consumers.
Some items need minor modification, other need major ones. Calantone , Cavusgil, Schmidt and shin (2004) debated Standardization/adaptation of products/ services offerings. They elucidate Standardization as presenting the same products/ services in the same market. The advantage of Standardization is the lower cost due to economies of scale and experience which is collected from introducing the same products/ services in multiple countries, The introduction of the identical products/ services can be unfavorable in the legal environment , climates, levels of markets, technological development, competitive and cultural factor 's. According to calantone, Cavusgil, shmidt and shin (2004) Consumers in different countries have unlike requirements and usage conditions, they stated that standardized products/ services may not be accepted by