Price$-$Setting Activities at Red Wolf Hardware

Many factors influence how a firm sets prices. Marketing executives in search of substantial profits typically want high prices across the products they sell. This activity is important because in order for marketers to achieve the optimal price point for a product and drive company profits, they must follow a six$-$step price$-$setting process, which includes:

Defining the pricing objectives.

Evaluating demand.

Determining the costs.

Analyzing the competitive price environment.

Choosing a price.

Monitoring and evaluating the effectiveness of the price.

The goal of this activity is to align different price$-$setting decisions with the correct steps of the price$-$setting process.

Match each of the pricing decisions to the appropriate step in the price setting process.

Atsuko has been hired as the new marketing manager at Red Wolf Hardware. The store's owner has noticed that the hammers are not selling well at their current price, and she is concerned that they are not generating enough profit for the store. Atsuko has been tasked with re$-$pricing these hammers following each of the steps of the price$-$setting process. At each step. Atsuko must make a specific decision that correlates with that step. Your task is to match each decision to the correct step in the process.

$5$

Choose a price

Monitor and evaluate the effectiveness of the price

Match each of the options above to the items below.

Atsuko decides that Red Wolf Hardware needs to increase the volume of hammers sold.

Atsuko reviews marketing research that shows consumers are not price sensitive when buying hammers.

Atsuko conducts a breakeven analysis based on the costs to sell the hammers.

Atsuko checks online to see what the other hardware stores in town are charging.

Atsuko utilizes reference prices to determine that Red Wolf customers should pay $$11$ for a standard hammer.

Atsuko determines that the revised price$-$setting process continued to yield low profits. She goes about developing new strategies for raising the price.