Marketing Journal Post 8: The Five Cs Of Pricing. Act II Popcorn
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Marketing Journal Post 8: The Five Cs of Pricing. Act II popcorn
Act II popcorn is the sweet and salty microwave popcorn which are very famous among people of North America. The sweetness in popcorn is provided by using sucralose in its composition, which gives sweetening effect in popcorn. Sodium chloride or common salt is used to provide sour taste in popcorns. Company is using the customer-oriented approach by applying modern pricing strategies. Customers demands the Act II popcorn due to its scrumptious taste and perceived benefit, which is higher than the cost. The product is selling in a large volume, which results in obtaining better economies of scale and it also leads to provide lower per-unit cost to customer (Brunetti, Büyükşahin & Harris, pp. 1547). The company is used to change the product specifications continuously according to the demand of customers which affects the price of Act II popcorn in the market.
Perfect competition in the market is another factor that may be driving down the price of popcorn, which may result in reducing the profit of popcorns on the arrival of high-quality competitor’s product in the market. It is also necessary for a business to drive down the prices to remain in competition with the product which comes with better quality in the market (Homburg, Jozić, & Kuehnl, pp. 380). It is also possible that the price of Act II popcorn can be affected by the collaborators, which help in making and selling of a product. Suppliers, distributors and alliance partner can also create a great influence on price of the product. The company may face a shutdown of a supply source which may result in scarcity of raw material it leads to high price of the product. It is necessary to have multiple suppliers in the market which could be helpful in reducing the cost of popcorns. The Government policies regarding import duties and taxation and other economic factors which includes inflation and higher interest rates may affect the price of the product (Knittel, & Pindyck, pp.89).
Brunetti, Celso, Bahattin Büyükşahin, and Jeffrey H. Harris. "Speculators, prices, and market volatility." Journal of Financial and Quantitative Analysis 51.5 (2016): 1545-1574.
Homburg, Christian, Danijel Jozić, and Christina Kuehnl. "Customer experience management: toward implementing an evolving marketing concept." Journal of the Academy of Marketing Science 45.3 (2017): 377-401.
Knittel, Christopher R., and Robert S. Pindyck. "The simple economics of commodity price speculation." American Economic Journal: Macroeconomics 8.2 (2016): 85-110.
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