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Mrktng May31

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Marketing
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Claflin University
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Homework
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1- What is the role of MSRP in your pricing decision?
Manufacturers Suggested Retail Price (MSRP), is the number that the manufacturer will present as
the suggested price for their product to be sold to the general market. MSRP is incredibly important
because it is regarded as the markets standard price.
People will fail to see legitimacy with the higher-costing goods if it was shown to be equivalent
with its competitoom but at a greater price, creating a mismatch between the supplier and customer,
which could be a major defect in their line of products.
With that said, MSRP is essential,but it is not final nor fixed, because it us subject to change due to
promotions. MSRP serves as a benchmark, however, when evaluating multiple marketplaces with
various volume discounts and promotions, a greater competitive edge may emerge.
2- For each brand in the following table, calculate the manufacturers selling
price (MSP), the per unit margin, and the gross margin as a percentage of MSP.
BRAND X
BRAND Y
MSRP
$5.29
$4.99
VOLUME DISCOUNT
30%
35%
PROMOTION ALLOWANCE
15%
12%
UNIT COAST
$1.18
$0.74
MSP
$3.70
$3.24
PER UNIT MARGIN
$2.52
$2.50
GROSS MARGIN %
68.1%
77.2%
3- For large retailers, the MSP represents their product cost, which they will
mark up to set the retail price. If the retailer has a target margin of 25%, what
would the retail prices be for the brands in question 2?
Brand X retail price: $4.94
Brand Y retail price: $4.32

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1- What is the role of MSRP in your pricing decision? Manufacturer’s Suggested Retail Price (MSRP), is the number that the manufacturer will present as the suggested price for their product to be sold to the general market. MSRP is incredibly important because it is regarded as the market’s standard price. People will fail to see legitimacy with the higher-costing goods if it was shown to be equivalent with its competitoom but at a greater price, creating a mismatch between the supplier and customer, which could be a major defect in their line of products. With that said, MSRP is essential ...
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