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Part one Any business can utilize a pricing strategy when marketing a product or service

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Part one Any business can utilize a pricing strategy when marketing a product or service. The price can be set to maximize profitability for each unit sold. It can be used to defend an existing market from new entrants (increasing the barriers to entry for new competitors), to increase market share within a market or to enter a new market. Review the Pricing strategies defined in module 3 and match the strategy to the scenarios provided. Provide a justification for your answers Premium Pricing / Price Skimming Penetration Pricing Economy Pricing Bundle Pricing Psychological Pricing A fine dining restaurant has priced their offerings substantially higher than its closest competition. A quick service restaurant has decided to use odd pricing i.e $3.47, $6.99 etc A new caterer has intentionally priced themselves lower than their nearest competitors. A sports bar has priced a weekly special that includes 1 lb of wings, a pitcher of beer and a dessert for one price A grocery store has decided not to spend much on marketing, but they offer their products at a consistently lower price Film Response Paper ABOUT THIS ASSIGNMENT: For this assignment, you will watch the documentary film, Invisible Hands: Investigating Modern Slavery of Children by Corporations (2018) and respond to four questions (see below). The documentary film shows how child labour is used within the supply chains of the world's biggest multi-national corporations. • Answer each question in a clear and organized paragraph. You may use more than one paragraph if necessary. • Be sure that the topic sentence of each paragraph uses key words from the question. • Paraphrase your answers. • Use specific content from the film and from course readings. Relate your answers to concepts learned in the course (i.e., forms and characteristics of globalization, history of globalization, economic and political globalization). • Pay attention to spelling, grammar, and punctuation. Link to Invisible Hands: Investigating Modern Slavery of Children by Corporationshttps://georgebrown.kanopy.com/video/invisible-hands Director: Shraysi Tandon Year: 2018 Run time: 74 mins * Content Warning: This film contains scenes of violence and includes challenging scenes related to child labour. ANSWER THE FOLLOWING FOUR QUESTIONS: 1. Describe any aspect of the documentary film, Invisible Hands, that showed you something you hadn’t seen before, caused you to think in a new way, or helped you understand something more thoroughly than before. In addition, describe how it changed your thinking. GSSC 1083 Fall 2021 1 2. Many global scholars argue that transnational corporations have become more powerful than national governments. Do you agree or disagree with this statement? Use examples from the film, Invisible Hands, and course material to support your opinion. 3. In 2015, the United Nations member states adopted 17 Global Goals for sustainable development, including the goal to end all forms of forced labour, modern slavery, and child labour by 2025. Do you think this goal will be achieved? Explain why or why not. Use examples from the film, Invisible Hands, and course material to support your opinion. 4. If you had a chance to ask any person in this film, Invisible Hands, a question, who and what would it be? Explain why you came up with your question specifically for this person. REQUIREMENTS: • Type your answers and save your work as a Microsoft Word Document. • Include your name (first, last and preferred) and student number on your assignment. DUE DATE: Upload your assignment to Blackboard no later than Sunday, October 3, 11:59 PM. ACADEMIC INTEGRITY: • PLEASE, honor yourself and respect your learning process by submitting your own work. • Do not copy ideas or sentences from articles found online. Do not use your friend’s assignment from last semester. Do not use assignments found on Course Hero and similar sites. • All papers will be checked for plagiarism using Safe Assign (text-matching detection software). • Plagiarized work will be given a '0' and you will be cited for academic misconduct. GSSC 1083 Fall 2021 2 Rubric Film Response Paper (20%) Each question is worth 5 points and will be based on the following grading criteria: Organization: Development of ideas is clear and easy to follow; logical relationships between ideas; thoughtful topic sentence and closing sentences are included- 1 mark Content: Fully and critically addresses all parts of the question; provides accurate and specific supporting details from the film; makes connections to relevant course concepts- 3 marks Grammar and mechanics: Writer makes little or no errors in grammar or spelling that distracts the reader from the content; sentences are well structured and contain proper punctuation; vocabulary is mature and appropriate- 1 mark Why products are priced as they are ? There was only thing stopping them... money. They both worked for a newspaper, but their salaries were small. So they decided to start a business on the side to earn more cash ? When Mel came back from an assignment in Australia wearing an interesting safari jacket he had bought for $5, the couple decided to start a clothing company. They had no business experience, no retail fashion experience, no backers, and only had $1,500.00 in the bank. The good news was it was 1978. The disco era was in full swing, and it wasn't a great time for fashion. It was a Saturday Night Fever polyester world. ? So the Zieglers went to a surplus store in town, and spent most of their savings on a shipment of paratrooper shirts that cost $1.75 each. They sewed elbow patches on them, changed the buttons, and figured the shirts could sell for a profit at a local flea market. ? They charged $6.75 - and sold four. Not great!! ? So the next weekend, Patricia decided to wear one of the shirts. She belted it, rolled up the sleeves, and put a sign on the table that said, "Short Armed Paratrooper Shirts." Then the Ziegler's did one more thing. They doubled the price. And immediately sold out. That was a big business lesson for the Zieglers. Doubling the price of their shirts at a flea market was an outrageous decision. Who doubles the price of anything at a flea market? But that new price point made people suddenly value the shirts more than they did the day before. With that success, the Ziegler's decided to open a small store. And they called it... Banana Republic. ? Virtually every purchase decision you make is, at least partially based on price. It tells you if the product has quality, if its luxury, if it's a commodity, if it's overpriced or if it's a bargain and a half. But what's easy to forget is that most prices are determined, not by cost, but by psychology. Prices are very carefully designed to influence our purchases, to steer us to specific items and persuade us to spend much more than we planned on. It's one of the most fascinating aspects of marketing ? Most people will agree that the price of a product is made up of three factors: 1. What it cost to make. 2. A reasonable markup or profit 3. What the competitive market will bear. But there is so much more to prices than that. Because there is enormous psychology at work. ? There are many pricing strategies marketers use to subtly influence your shopping decisions. One of the most popular is called, "anchoring." Anchoring is based on first impressions. If you are shown a high price for an item, your expectations for the value of that item will shift upwards. It gives you a frame of reference, especially if you are a little uncertain about what you should be paying. So many retailers use an "anchor price" to influence your purchase decision. Essentially, they will offer you a highly priced product. Then, they will offer you a slightly lower-priced option. ? ? Williams-Sonoma once used the concept of anchoring to solve an interesting problem When they introduced their bread machines, sales were slow and sluggish. So they added a "deluxe" version that was priced 50% higher. Suddenly, the original bread machine started flying off the shelves. Now, it felt like a bargain. Anchoring can also affect how you value something. ? In his book Predictably Irrational, psychology professor Dan Ariely tells the story of a fascinating experiment he carried out with his students. First, he asked each of them to write down the last two digits of their Social Security Numbers on a piece of paper. Next, he showed them a bottle of wine, and described the flavour, the winery, and read a positive review from a wine publication. Then he asked the students to guess the price of the wine. That's when the most interesting thing happened. ? Students who had the highest-ending Social Security digits - from 80 to 99 - guessed the highest prices for the wine. The students with the lowest Social Security numbers - from 11 to 20 - guessed the lowest prices. Look at what just happened there - by asking the students to write down a number just prior to making a price guess - influenced that guess. Their Social Security numbers had acted as an anchor. The bigger numbers influenced high guesses, the smaller numbers influenced low guesses. ? That's how powerful anchoring can be Illusion and the choices we make ? In his book, Priceless: The Myth of Fair Value, author William Poundstone analyzes a typical menu, showing how they are carefully constructed to steer you to certain dishes. As a rule, the upper right-hand corner is the first place your eyes go to on a menu. Knowing that, restaurants put their most expensive dish in that spot. It's an anchor. It's designed to make your eyebrows shoot up a little. Its purpose is to make everything else look like a relative bargain. Right next to that dish will be the restaurant's most profitable items. Those are the dishes the menu is really trying to steer you to. ? In a recent experiment, diners were split into three groups and given three different menus. One group was given a menu that had dollar signs in front of the numbers, the second group was given a menu where the dollar amounts were spelled out in full words, and the third group was given menus with numbers but no dollar signs. ? ? Menus with no dollars signs convince us to spend more at restaurants. Source: gghpt.com As it turned out, there was no difference in spending between the menus with dollar signs and the ones with words. But diners ordering from the menu without dollar signs all spent more money. ? Most people can't distinguish a more expensive wine from a cheaper wine when the labels are removed. And that includes top wine experts. When people are given a glass of wine, and told that the wine is expensive, it triggers a specific part of the brain that registers pleasure. This effect has even been observed in an experiment when the wines were sipped inside an MRI machine that recorded brain activity. ? People were given five wines to taste, and told the wines ranged from $5 a bottle, up to $90 a bottle. All the subjects unanimously agreed the expensive wine was better - even when they thought the $5 dollar bottle was the $90 dollar wine. They still experienced more pleasure and the MRI brain activity proved it. The same effect was observed in a pharmaceutical drug test. ? One group was given a drug to relieve pain, and told that it was expensive. The other group was given the same drug, but told it was cheaply priced. The group who thought they had the more expensive drug claimed it worked faster and relieved pain longer than the group with the supposed cheaper alternative. Higher pricing creates higher expectations - but it should also creates higher fulfillment. ? So if a highly-priced wine stimulates that part of your brain that registers pleasure, then you've experienced pleasure. Q&A ? If mobile phone companies only charged by the minute, for example, you'd easily pick the cheapest one, and the phone companies would be locked in a death race to the bottom - with no profit in sight. So what they do is "bundle" services. The per-minute call rate will be bundled with text, picture and video messaging, mailbox quotas, browsing options, data plans, favourite-number discounts, unlimited long distance calling, and even internet and cable options. One of the biggest reasons for bundling is to make sure the packages can never really be compared. You won't find the same bundling at any two companies ? This method of not pricing items in round numbers is also called "Odd Pricing" referring to the resulting odd price numbers like 69 or 99 cents. The practice of odd pricing has been used for for more than a century. ? ? It can be tracked it as far back as 1875.A paper called the Chicago Daily News was founded. It sold for one cent. The problem was there weren't enough pennies in circulation. So the owner of the newspaper went to the retail stores who advertised in his paper, and asked them to lower the prices on their goods by one cent. The merchants agreed to help the paper out. The odd pricing actually increased sales for the merchants. ? It has been proven time and again that when lawyers ask for astronomical financial settlements, juries may not give the lawyer exactly what he's asking for - but they will almost always award a higher settlement, than if the lawyer had begun with a lower amount. The astronomical ask was the anchor. Restaurants use the concept of anchoring very effectively. ? In his book, Priceless: The Myth of Fair Value, author William Poundstone analyzes a typical menu, showing how they are carefully constructed to steer you to certain dishes. As a rule, the upper right-hand corner is the first place your eyes go to on a menu. Knowing that, restaurants put their most expensive dish in that spot. It's an anchor. It's designed to make your eyebrows shoot up a little. Its purpose is to make everything else look like a relative bargain. ? Right next to that dish will be the restaurant's most profitable items. Those are the dishes the menu is really trying to steer you to. anchoring explained ? ? ? ? ? ? ? ? ? We're All Predictably Irrational - Dan Ariely Predictably Irrational - Chapter 2: Supply and Demand? https://www.youtube.com/watch?v=JhjUJTw2i1M https://www.youtube.com/watch?v=FaO3aGmuNFc The Myth of Fair Value, author William Poundstone gghpt.com http://ethicalnag.org/2010/01/01/menu-order/ Getting started with your menu makeover By Wayne McKay April 13, 2011 http://www.youtube.com/watch?v=FaO3aGmuNFc Premium Pricing / Price Skimming = A fine dining restaurant has priced their offerings substantially higher than its closest competition. The prices are set higher than a normal restaurant to make them stand out and to make customers assume exceptional quality food. When prices are a bit higher people are willing to give it a try as they want to know how much of a quality they are able to receive but the restaurant would need to work hard to serve consistant quality to maintain their prices. Penetration Pricing = A new caterer has intentionally priced themselves lower than their nearest competitors. This is a much safer way to promte your business unlike the "premium pricing". Pricing lower than the competitors will definitely engage more customers and as long as the food can satisfy customers mouth, word of mouth would naturally spread and will get much more customers coming in. However, raising the price suddenly will not be so easy but should do it very slowly and naturally. Economy Pricing = A grocery store has decided not to spend much on marketing, but they offer their products at a consistently lower price. This can target people with families with children. Customers like these would prefer a lower price. As long as the price is low and the quality is there, customers will continue to come back for their groceries. In the end, price matters. :) Bundle Pricing = A sports bar has priced a weekly special that includes 1 lb of wings, a pitcher of beer and a desser for one price. Bundle pricing is one of the most popular startegies that is being used in variety of different establishments. It not only increase the sales but also is a way to use your food ingredients equally. Psychological Pricing = A quick service restaurant has decided to use odd pricing i.e. $3.47, $6.99 etc. This is also another popular strategies that is being used often in North America. By decreasing few cents or just one cent, the dollar amount changes which will engage customers to buy the product. For example, people do realize that $4.99 is same thing as $5.00. However, this still makes difference when it comes to choosing a product nowadays. Reply Quote