# Retail pricing strategy

Aug 2nd, 2015
Anonymous
Category:
Price: \$15 USD

Question description

Pricing Strategy

Scenario

The online retail operation you recently opened is doing well but you are uncertain of your pricing strategy. Currently the typical customer purchases four items at an average price of \$11.96 and for an average transaction size of \$47.84. The cost of goods is 60 percent of sales, which yields a gross margin of 40 percent. You are considering lowering prices by 10 percent across the board so you can better compete with other music e-tailers.  If you lower prices by 10 percent, you believe that the average number of items purchased per customer would rise by 25 percent.

Assuming your assumptions are correct, should you lower prices by 10 percent across the board? If not, do you have an alternative pricing strategy to propose?

•Review the scenario and address each question while showing work for all mathematical problems.

•Provide full analysis for all conclusions made.

•For any assumptions made, be sure to reference the scenario when providing justification for responses.

Include a title page and any references used.

(Top Tutor) sajarin
School: UT Austin

Studypool has helped 1,244,100 students

Review from student
Anonymous
" Top quality work from this guy! I'll be back! "

1831 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors