Case Study (15% to the Final Grade)

(This is an Individual Assignment)

SWEET BUSINESS: PRICING AT AMY'S CANDY BAR

Synopsis:

An upscale candy store is located in the north side of Chicago. It specializes in high quality chocolates, gummies and homemade candy. While most businesses focus on maximizing profit or maximizing volume, owner Amy Hansen is focused on keeping her prices affordable.

https://amyscandybar.com/

Watch the Video:

https://www.viddler.com/embed/bc0f40ea

This video case discusses general pricing concepts. Some of the key terms and equations used arePrice (P), Total Revenue (TR), Total Cost (TC), Fixed Costs (FC), Variable Costs (VC), Unit Variable Costs (UVC), and Break-Even Point (BEP). The break-even point equation and the profit equation are given below:

BEP =	Fixed Cost
Unit Price - Unit Variable Cost

Profit = Total Revenue - Total Cost

= (Unit Price x Quantity Sold) - Total Cost

= (P x Q) - [FC + (UVC x Q)]

Furthermore, please be familiar with the value in relation to perceived benefits.

Value =	Perceived Benefits
Price

Questions

1. What role do customers play in Amy's Candy's pricing strategy? What research did Amy accomplish in order to determine her customers' ability to pay for her products?

1. How do Amy's competitors influence the prices at Amy's Candy?

1. How do seasonal influences impact Amy's pricing strategy?

1. How do Amy's costs influence the prices she charges her customers? What can she do to control cost without sacrificing quality

1. Recommend a strategy - how she can stimulate the demand in the market or at the customer's end?