Fri Oct 30

 https://www.cbc.ca/dragonsden/pitches/bad-monkey-popcorn

website:https://badmonkeypopcorn.com/pages/our-story

Halloween Special

Update on how the company is doing

Brainstorm Ideas for school business

Find an appropriate video ad to show to the class fo next Tues.

Thurs Oct 28 Incredible Eats

 https://incrediblespoon.com

The Promotions Mix

Tues Oct 26

 NOTE to class: We will continue Sugru presentations when Ms Chase returns.

Link to Lululemon History Read out to class

https://info.lululemon.com/about/our-story/history

Watch video

Check out Lululemon's website here: lululemon Website

Understanding how a company presents itself to the customer is an important part of business. Move your way through the Lululemon website and answer the following questions. This assignment will be marked out of 10 and handed in. To be done individually or in partners.

For students who have analyzed this company before ( last year's group) choose your own large company and answer the following questions around that company.

Lululemon Analysis (20 marks)  

PLEASE TYPE YOUR RESPONSES ON A SEPARATE SHEET 

A lot of the information to answer these questions can be found at the bottom of the website, 

 

1. What does Lululemon sell? ( List a few sample products) 

2. Who is their target market? (sex, age etc) Is there more than one target market? Give details. Do you think Lululemon provides products men would buy?

3. List the positives of the website, what works? (2-3 points) 

4. What could be done better on the website? (list 3 points) 

5. Do you think they use effective photos to advertise their products? 

6. Is there an obvious mission/slogan/manifesto that Lululemon has, if so what is it? 

7. What is the company's return policy like? How important you think this to online shoppers?

8. What do you the purpose of the community section is on their site? 

9. Do you think the community section of their site is effective...explain your reasoning. why/why not? 

10. List the programs the company is involved in. What do you think is effective about these programs, do you think they are in line with the company’s goals? 

( diversity and body positivity)

11. What makes a business a good corporate citizen? List 3 ways that Lululemon is a good corporate citizen.  

12. Do you think the prices for items are reasonable and in line with other competitor's products? Give details by searching competitors products. 

13. What promotions if any, does Lululemon offer at this time.

14. What kind of jobs would be available in this company? Is this a company you would want to work for? Explain why or why not. 

15. Check out the investor's section, what is the company's stock price today?

16. Check out Lululemon’s Social Media sites, are the sites working, do they have engaged followers? How do you know if the followers are engaged? 

Mon Oct 25

How Sugru was invented 

Sugru website: https://sugru.com/

sugru hack video

hacks #2

Group Assignment:  ( 8 groups) After learning about Sugru, your group need to play with the product, create a Sugru hack and then complete the Sugru worksheet.

Thurs Oct 21

 1. Tech mini presentations from students who were away.

 2. Review of Tuxy video: in partners, jot down the positives of the new Tuxy design and the negatives of the Tuxy design. Do you think the product is priced reasonably, give your reasons using what you know about pricing strategy. There is no right answer to this question.

 3. Let's see the Dragon's Den Pitch

4. https://www.cbc.ca/dragonsden/pitches/abeego-designs-inc

What are the downsides of this product? Is it appropriately priced.

Wed Oct 20

 Today's Class Outline

• Review of handing in quality work, and how to get full marks, handing in work
• Collection of Bobby Hundreds and any late assignments, "there is late and then their is VERY late, and then there is I will not accept late"
• Handing back old work, concerns see me, I am reasonable, but do not grovel for marks
• Chop stick products to show you
• Luxury Pricing info...add to your notes
• Introduction of your new tech product
• Dragon's Den...TUXY

https://www.ca.tuxy.co/pages/product-features

https://www.cbc.ca/dragonsden/pitches/tuxy

Bobby Hundreds

Introduction

Bobby Hundreds is one of the two founders of The Hundreds founded in 2003. Also known as Bobby Kim, he met Ben Shenassafar other founder, while at law school. Kim graduated from UC San Diego before going onto Loyola Law School, finishing at the top of his class.

PART 1: Watch the video in class and then answer the following. Due Wed. in class. (10 marks)

List and explain 5 qualities that Bobby Hundreds has that make him a great entrepreneur.

Example: He did what he was passionate about. For example he decided to give up being a lawyer to pursue his dream of developing a streetwear company.

“There’s no shortage of remarkable ideas, what’s missing is the will to execute them.” – Seth Godin

PART 2 : We have spent some time looking at innovative products on Kickstarter and Indiegogo. Have a look at the Future Tech site on you Tube ( watch a few videos) and find one new futuristic product to introduce to the class on Wed. You will present the idea and describe what it does and then determine if the product would be successful. This is for marks.

Pricing Continued Week of Oct 18

Why Supreme can charge the prices they do.

Understanding Private Label Brands and Price Differentiation

 Luxury/Premium Pricing

Premium pricing, also referred to as "image pricing" or "prestige pricing," aims to display the quality and experience associated with a product, in which a seller deems artificially high prices for a product or service.

Wed. Oct 13 pricing Continued

Partner Pricing Assignment: You are opening a new school store at Isfeld. You have to determine 3 products that you think would be good potential products in order to make money for the school. I want you to find these products at wholesale and then set the retail price for each product. 

Answer the following questions with regard to your task.

1. Why and how did you decide on the products you decided to put into the school store? Please explain the quality level of these products whether each is a high, medium , or a low end product.

2. Determine a pricing strategy for each of the 3 products and explain why you chose this strategy to price your products.

3. List the wholesale and retail cost for each product as well as the profit margin for each product.

4. If you sold 100 of each product, determine then dollar value profit you would make on each product and the total profit of all of the products combined.

Example to understand simple profit margin.

Profit margin= net sales-cost of goods sold / net sales 

$20 - $10 = $10 divided by $20 = 0.5 = 50% profit margin

Understanding Premium Pricing

Pricing

Pricing Strategies

Deciding how much to charge for your product requires more thought than simply calculating your costs and adding a mark-up.“How much the customer is willing to pay for the product has very little to do with cost and has very much to do with how much they value the product or service they’re buying,” says Eric Dolansky, Associate Professor of Marketing at Brock University in St. Catharines, Ont. 

Pricing strategies are useful for numerous reasons, though those reasons can vary from company to company. Choosing the right price for a product will allow you to maximize profit margins if that’s what you want to do. Contrary to popular belief, pricing strategies aren’t always about profit margins. For instance, you may opt to set the cost of a good or service at a low price to maintain your hold on market share and prevent competitors from encroaching on your territory.

In these cases, you may be willing to sacrifice profit margins in order to focus on competitive pricing. But you must be careful when engaging in an action like this. Although it could be useful for your business, it also could end up crippling your company. A good rule of thumb to remember when pricing products is that your customers won’t purchase your product if you price it too high, but your business won’t be able to cover expenses if you price it too low.

10 different pricing strategies to consider

Here are ten different pricing strategies that you should consider as a small business owner.

1. Pricing for market penetration

As a small business owner, you’re likely looking for ways to enter the market so that your product becomes more well-known. Penetration strategies aim to attract buyers by offering lower prices on goods and services than competitors.

For instance, imagine a competitor sells a product for $100. You decide to sell the product for $97, even if it means you’re going to take a loss on the sale. Penetration pricing strategies draw attention away from other businesses and can help increase brand awareness and loyalty, which can then lead to long-term contracts.

Penetration pricing can also be risky because it can result in an initial loss of income for the business. Over time, however, the increase in awareness can drive profits and help small businesses stand out from the crowd. In the long run, after penetrating a market, business owners can increase prices to better reflect the state of the product’s position within the market.

2. Economy pricing

This pricing strategy is a “no-frills” approach that involves minimizing marketing and production expenses as much as possible. Used by a wide range of businesses, including generic food suppliers and discount retailers, economy pricing aims to attract the most price-conscious consumers. Because of the lower cost of expenses, companies can set a lower sales price and still turn a slight profit.

While economy pricing is incredibly useful for large companies like Walmart and Target, the technique can be dangerous for small businesses. Because small businesses lack the sales volume of larger companies, they may find it challenging to cut production costs. Additionally, as a young company, they may not have enough brand awareness to forgo custom branding.

3. Pricing at a premium

With premium pricing, businesses set costs higher because they have a unique product or brand that no one can compete with. You should consider using this strategy if you have a considerable competitive advantage and know that you can charge a higher price without being undercut by a product of similar quality.

Because customers need to perceive products as being worth the higher price tag, a business has to work hard to create a perception of value. Along with creating a high-quality product, owners should ensure that the product’s packaging, the store’s decor, and the marketing strategy associated with the product all combine to support the premium price.

An example of premium pricing is seen in the luxury car industry. Companies like Tesla can get away with higher prices because they’re offering products, like autonomous cars, that are more unique than anything else on the market.

Price to Position if you are the best in the market

This strategy is based on your position within the marketplace. If you are the leading expert, you can charge a lot more money. A lot of people understand how it is to sell lots of products, but how do you position yourself as the go-to brand? How do people know you’re the expert on whatever it is you do?

When you understand basic supply and demand, you are ahead of many competitors. Ask yourself how you can create more demand for what you do. After you’ve done that, you want to restrict the supply.

This all comes down to not flooding the market with your product or service. It’s better to keep the price higher by making sure the demand stays higher than the supply, just as the diamond market does.

4. Price skimming

Designed to help businesses maximize sales on new products and services, price skimming involves setting rates high during the initial phase of a product. The company then lowers prices gradually as competitor goods appear on the market. An example of this is seen with the introduction of new technology, like an 8K TV, when currently only 4K TVs and HDTVs exist on the market.

One of the benefits of price skimming is that it allows businesses to maximize profits on early adopters before dropping prices to attract more price-sensitive consumers. Not only does price skimming help a small business recoup its development costs, it also creates an illusion of quality and exclusivity when you first introduce your product to the marketplace.

5. Psychological pricing

Psychological pricing refers to techniques that marketers use to encourage customers to respond based on emotional impulses, rather than logical ones.

For example, setting the price of a watch at $199 is proven to attract more consumers than setting it at $200, even though the actual difference here is quite small. One explanation for this trend is that consumers tend to put more attention on the first number on a price tag than the last. The goal of psychology pricing is to increase demand by creating an illusion of enhanced value for the consumer.

6. Bundle pricing

With bundle pricing, small businesses sell multiple products for a lower rate than consumers would face if they purchased each item individually. A useful example of this occurs at your local fast food restaurant where it’s cheaper to buy a meal than it is to buy each item individually.

Not only is bundling goods an effective way to reduce inventory, it can also increase the value perception in the eyes of your customers. Customers feel as though they’re receiving more bang for their buck. Many small businesses choose to implement this strategy at the end of a product’s life cycle, especially if the product is slow selling.

Small business owners should keep in mind that the profits they earn on the higher-value items must make up for the losses they take on the lower-value product. They should also consider how much they’ll save in overhead and storage space by pushing out older products.

7. Geographical pricing

If you expand your business across state or international lines, you’ll need to consider geographical pricing. Geographical pricing involves setting a price point based on the location where it’s sold. Factors for the changes in prices include things like taxes, tariffs, shipping costs, and location-specific rent.

Another factor in geographical pricing could be basic supply and demand. For instance, imagine you sell sports performance clothing. You may choose to set a higher price point for winter clothes in your cold-climate retail stores than you do in your warm-climate stores. You know people are more likely to buy the clothes in the winter environments, so you set a higher price to take advantage of demand.

8. Promotional pricing

Promotional pricing involves offering discounts on a particular product. For instance, you can provide your customers with vouchers or coupons that entitle them to a certain percentage off the good or service. You could also entertain a “Buy One Get One” campaign, tacking on an additional product as an add-on.

Promotional pricing campaigns can be short-term efforts. For instance, you may run a promotional pricing strategy over an extended holiday, like Memorial Day Weekend. By offering these deals as short-term offers, business owners can generate buzz and excitement about a product. Promotional pricing also incentivizes customers to act now before it’s too late. This pricing strategy plays to a consumer’s fear of missing out.

9. Value pricing

If you notice that sales are declining because of external factors, you may want to consider a value pricing strategy. Value pricing occurs when external factors, like a sharp increase in competition or a recession, force the small business to provide value to its customers to maintain sales.

This pricing strategy works because customers feel as though they are receiving an excellent “value” for the good or service. The approach recognizes that customers don’t care how much a product costs a company to make, so long as the consumer feels they’re getting an excellent value by purchasing it.

This pricing strategy could cut into the bottom line, but businesses may find it beneficial to receive “some” profit rather than no profit. An example of value pricing is seen in the fashion industry. A company may produce a product line of high-end dresses that they sell for $1,000. They then make umbrellas that they sell for $100.

The umbrellas may cost more than the dresses to make. However, the dresses are set at a higher price point because customers feel as though they are receiving much better value for the product. Would you pay $1,000 for an umbrella? Probably not. Thus, external factors like customer perceptions force the value pricing strategy.

10. Captive pricing

If you have a product that customers will continually renew or update, you’ll want to consider a captive pricing strategy. A perfect example of a captive pricing strategy is seen with a company like Dollar Shave Club. With Dollar Shave Club, customers make a one-time purchase for a razor. Then, every month, they purchase new razor blades to replace the existing one on the head of the razor.

Because the customer purchased a DSC razor handle, he or she has no choice but to buy blades from the company as well. Thus, the company holds customers “captive” until they decide to break away and buy a razor handle from another company. Businesses can increase prices so long as the cost of the secondary product does not exceed the cost that customers would pay to leave for a competitor.

Kickstarter/Indiegogo Assignment

 This assignment is to be done on your own and it is to be typed.

1. Check out both Indiegogo and Kickstarter. Find an interesting product to do the assignment.

2. Complete the following questions:

• Describe the product, include a photo or drawing.
• What problem is the product solving?
• Describe who you think the target market for the product is and explain why you think this.
• List the positives of the product and why you think it will be successful. Define any negatives associated with the product.
• Tell me how much money the product has raised
• Rate the product idea on a scale from 1-10 1= not effective to 10= very effective.

Questions to ask yourself before launching a product

 Link to Article on Questions to ask yourself before launching a product.

Questions

Week of Oct 5

 Outline of Monday's class:

• Finish up final group presentation
• Innovative products video ( see Friday's post)
• Homework Assign: problem.....product idea HAND IN
• Demographics and Psychographics
• Hand out review sheet

What are Demographics? Demographics describe who we are as individuals, for example: ethnicity, age/generation, gender, income, marital status, education, and homeownership.

What are Psychographics? Psychographics is the study of consumers based on their activities, interests, and opinions, values and behaviours. (AIOs). It goes beyond classifying people based on general demographic data, such as age, gender, or race. Psychographics seeks to understand the cognitive factors that drive consumer behaviors.

Tues/Wed: Prepare for test ( time to work in class), we will review the sheet during part of Wed.'s class. and have an introduction on Kickstarter and Indiegogo

Thurs.: Test

Friday: Time to work on Kickstarter/Indiegogo assignment/Dragon's Den episode

Next week on to Price