Executive Memo – Price Discrimination

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Economics

Description

2 to 3 page Executive Memo - see file uploaded

The company’s core business product has shown steadily shrinking profitability and

you’ve been asked to address the problem by coming up with at least one new pricing

technique. Your boss and the Regional VP of Finance will meet with you at the end of the month

to hear your proposal.

Prior to the meeting, your boss would like to see a brief Memo that outlines your proposal and

the impact you expect it to have on units sold and profits. The RVP of Finance is new to the

company, so you will also need to include a section that contains a brief description of the

product and its history.

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JWI 515: Managerial Economics Academic Submissions and Evaluation Assignment 2: Executive Memo – Price Discrimination (Weight: 10%) Due by Sunday, midnight of Week 7 Your Assignment It’s time to crunch some numbers! Your boss has just given you an important, high priority assignment. The company’s core business product has shown steadily shrinking profitability and you’ve been asked to address the problem by coming up with at least one new pricing technique. Your boss and the Regional VP of Finance will meet with you at the end of the month to hear your proposal. Prior to the meeting, your boss would like to see a brief Memo that outlines your proposal and the impact you expect it to have on units sold and profits. The RVP of Finance is new to the company, so you will also need to include a section that contains a brief description of the product and its history. Instructions Develop a 2 to 3 page Executive Memo for your boss. Use the outline below to structure your Memo: 1. Describe the company’s product or service, using relevant economic terminology. Questions to address include, but are not limited to: • What is the product or service? What Utility or benefit does it provide to the consumer? • What is your company’s history with this product or service? • What does the competition in the market look like for this product or service? • What actions has your company taken to remain competitive? 2. Provide one or more specific proposals for price discrimination: • • Which Price Discrimination technique(s) will you use? In order for your proposal to generate more profits, will you recommend Mark-up or Margin pricing? Why? • What is the current price? What will be the new price? 3. Explain how implementing your proposal is expected to impact consumer demand: • How will your proposal impact sales in the first three months? • • How will your proposal impact sales within eighteen months? What would increased sales enable the company to do differently? © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course guide is subject to change based on the needs of the class. JWI 515 – Assignment 2 (1184) Page 1 of 4 JWI 515: Managerial Economics Academic Submissions and Evaluation Professional Formatting Requirements Your assignment should follow these formatting requirements: • Typed, double-spaced, professional font (size 10-12), include headings and subheadings, with one-inch margins on all sides • In place of a Cover page, provide the following heading on Page One of your Memo: Ø Ø Ø Ø TO: Insert Professor’s Name FROM: Insert Your Name DATE: Insert Assignment’s Due Date RE: Managerial Economics 515, Assignment 2 © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course guide is subject to change based on the needs of the class. JWI 515 – Assignment 2 (1184) Page 2 of 4 JWI 515: Managerial Economics Academic Submissions and Evaluation RUBRIC: Assignment 2 CRITERIA Unsatisfactory Low Pass Pass High Pass 1. Describe the product or service using appropriate economic terminology. Product or service is not described using appropriate economic terminology, and/or the product or service history and the competition are not described. Product or service is partially described using appropriate economic terminology. The product or service history and the competition are also partially described. Product or service is sufficiently described using appropriate economic terminology. The product or service history and the competition are also sufficiently described. Product or service is thoroughly described using appropriate economic terminology. The product or service history and the competition are also thoroughly described. Product or service is exemplarily described using appropriate economic terminology. The product or service history and the competition are also exemplarily described. Specific proposals for price discrimination are not provided, and/or recommendations for markup or margin pricing are not explained. The student has not described how the proposal will generate profits. One or two specific proposals for price discrimination are provided with partial detail. Recommendations for markup or margin pricing are partially explained. The student has partially described how the proposal will generate profits. One or two specific proposals for price discrimination are provided with sufficient detail. Recommendations for markup or margin pricing are well explained. The student has sufficiently described how the proposal will generate profits. Two or more specific proposals for price discrimination are provided with thorough detail. Recommendations for markup or margin pricing are thoroughly explained. The student has thoroughly described how the proposal will generate profits. Two or more specific proposals for price discrimination are provided with exemplary detail. Recommendations for markup or margin pricing are exemplarily explained. The student has exemplarily described how the proposal will generate profits. Proposal’s impact on consumer demand is not explained, including sales for the first three months and within twelve months. The student has not explained what increased sales would enable the company to do differently. Proposal’s impact on consumer demand is partially explained, including sales for the first three months and within twelve months. The student has partially explained what increased sales would enable the company to do differently. Proposal’s impact on consumer demand is sufficiently explained, including sales for the first three months and within twelve months. The student has sufficiently explained what increased sales would enable the company to do differently. Proposal’s impact on consumer demand is thoroughly explained, including sales for the first three months and within twelve months. The student has thoroughly explained what increased sales would enable the company to do differently. Proposal’s impact on consumer demand is exemplarily explained, including sales for the first three months and within twelve months. The student has exemplarily explained what increased sales would enable the company to do differently. Weight: 25% 2. Provide one or more specific proposals for price discrimination, its pricing strategy, and benefits to consumers. Weight: 40% 3. Explain how implementing your proposal is expected to impact consumer demand. Weight: 25% Honors © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course guide is subject to change based on the needs of the class. JWI 515 – Assignment 2 (1184) Page 3 of 4 JWI 515: Managerial Economics Academic Submissions and Evaluation CRITERIA 4. Clarity, logic, writing mechanics, and formatting. Weight: 10% Unsatisfactory Low Pass Pass High Pass Honors Multiple mechanical errors; much of the text is difficult to understand or the text does not flow; fails to follow formatting instructions. Several mechanical errors make parts of the text difficult for the reader to understand; the text does not flow; the discussion fails to justify conclusions and assertions. More than a few mechanical errors; text flows but lacks conciseness or clarity; assertions and conclusions are generally justified and explained. Few mechanical errors; text flows and concisely and clearly expresses the student’s position in a manner that rationally and logically develops the topics. Few to no mechanical errors; text flows and concisely, clearly, and exemplarily expresses the student’s position in a manner that rationally and logically develops the topics. © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course guide is subject to change based on the needs of the class. JWI 515 – Assignment 2 (1184) Page 4 of 4 INTEROFFICE MEMORAND UM TO: FROM: ELNA HAMP SUBJECT: MANAGERIAL ECONOMICS- PRICE DISCRIMINATION DATE: AUGUST 15, 2018 Our Product ProEdTech started as a healthcare training company more than a decade ago and has become a leading source of education, training and information for professionals in medical coding, billing and compliance. In 2013, the company entered the governance, risk management and compliance training space in other industries including HR and payroll, pharmaceuticals, food safety, banking and education and has moved to other industries as it gained expertise and increases its customer base. ProEdTech has an esteemed panel of 300+ experts spanning various industries and conducts close to 500 online events annually. To date, the company has trained more than 100,000 professionals from the healthcare, pharmaceutical, food safety, HR, banking, legal, education, housing and construction, manufacturing, technology, trade and other industries. In many of the industries, we offer continuing education units (CEU’s) for professionals with certificates or licenses to practice various professions. Currently, ProEdTech is headquartered in India. We have 148 employees in India and three employees in the US. In 2016, ProEdTech started to see a decline in revenue and profitability. This was caused by several factors, increase in competition, limited regulation and compliance updates, layoff’s that resulted in Current Pricing Practices ProEdTech’s has competitors in every vertical we serve and 60% of our instructors work with our competitors. Based on these factors the company has deployed a competitive pricing strategy. This has resulted in a narrowing of profit margins. . when several other businesses sell the same product and there is little to distinguish one vendor from another. A market leader will generally set the price for the product and other vendors will usually have no option but to follow suit in order to remain competitive. Vendors will either match the pricing of the market leader or set prices within a comparable range. currently uses a a competitive pricing strategy. New Pricing Practices I will use two major Price Discrimination techniques:1. Quantity Discounts – 2. Enterprise packaging – Implementation Results 2
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Explanation & Answer

Attached.

Managerial Economics- Price Discrimination - Outline
I.

Current Strategy
A. Price leadership

II.

New Pricing Strategies
A. Quantity discounts
B. Penetrative pricing


INTEROFFICE MEMORAND UM
TO:
FROM:

ELNA HAMP

SUBJECT:

MANAGERIAL ECONOMICS- PRICE DISCRIMINATION

DATE:

AUGUST 15, 2018

Our Product
ProEdTech started as a healthcare training company more than a decade ago and has become a
leading source of education, training and information for professionals in medical coding, billing
and compliance. In 2013, the company entered the governance, risk management and compliance
training space in other industries including HR and payroll, pharmaceuticals, food safety,
banking and education and has moved to other industries as it gained expertise and increases its
customer base. ProEdTech has an esteemed panel of 300+ experts spanning various industries
and conducts close to 500 online events annually. To date, the company has trained more than
100,000 professionals from the healthcare, pharmaceutical, food safety, HR, banking, legal,
education, housing and construction, manufacturing, technology, trade and other industries. In
many of the industries, we offer continuing education units (CEU’s) for professionals with
certificates or licenses to practice various professions.

Currently, ProEdTech is headquartered

in India. We have 148 employees in India and three employees in the US.
In 2016, ProEdTech started to see a decline in revenue and profitability.

This was caused by

several factors, increase in competition, limited regulation and compliance upd...


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