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Managerial Economics and Globalization - Assignment Example

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The following assignment "Managerial Economics and Globalization" dwells on the challenges of the modern for price management. It is stated that increasing prices at times to manage costs is a natural and commonly adopted phenomenon that every entrepreneur or manager would prefer to go for…
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Managerial Economics and Globalization
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Download file to see previous pages The theoretical framework of price elasticity can provide a company with numerous pricing strategies to cope up with the increasing the costs (Morris and Morris).
Now if we move onto the low calories, frozen microwaveable food products, it is important for the managers to know if their product is a necessity or a luxury. Managers of low calorie, frozen microwaveable food company will be required to conduct some world-class marketing of their products because until the customers consider their frozen microwaveable products as their necessity, there is no hope to achieve inelastic demand irrespective of the price. Such an analysis of product necessity can be acquired through customer segmentation. Universally if the prices of a necessity suppose oil is raised, people will protest at first but later on will adjust to the scene whereas in case of a tourism trip to suppose Malaysia, if the prices go high the next plane to Malaysia will lose half of its passengers. So, managers must know from where their revenue comes (B2B or B2C) and from where it might dry up if prices are raised.
Secondly, what affects the demand of any product the most is a cheap substitute, if I’m a customer and prices of frozen microwaveable products have increased, I might look for a substitute instead of rotting my money on brand loyalty. Managers must consider if there exists a lot of competition or hardly any competitor, only then increasing prices should be considered an option. Given the circumstances of customer loss, product differentiation can also be appreciated. Managers must understand that variety of products while fulfilling the demand of customers and providing what competitors lack will take low calorie, frozen microwaveable products off even if the prices are higher. ...Download file to see next pagesRead More
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