Allover holding Plc sales three (3) products in three (3) different market sectors in Zambia. In a recent meeting, the Chief Financial Officer and Chief Marketing Officer discussed the pricing aspect of these products.



Product A: The market for this product is highly competitive and the product is ordinary. The major competitors add a profit margin of 15% on the production costs to determine the selling price. The average production costs is K240 per unit which is considered to be very high.



Product B: Allover holdings Plc controls over 97% of the market share for this product and its competitors are very small. The production costs is K300 per unit and the Chief Financial Officer has advised that a make-up of 30% on full cost should be added.



Product C: The market research recently conducted for this product indicated that most customers are interested in the quality and taste of the product. The average production costs is K200 per unit. Some customer are will to be charged 35% margin of the production costs and others 40% make-up on full cost.



Required



1) Recommend with reasons the appropriate pricing approach that Allover holdings Plc can adopt for pricing each of the three (3) products.                                                        

2) Determine the selling price of each of the three (3) products.

Answer rating: 100% (QA)

Pricing Approaches for Allover Holdings Plc a Product A Since the market for Product A is highly competitive and the product is considered ordinary it ... View the full answer