Short Case Scenario 12-1

question 385

Essay

Short Case Scenario 12-1
Bill and Farrah have been recently hired by Superior Stereo Systems, a cutting-edge manufacturer of stereo speakers. Both Bill and Farrah have been assigned to work on two product teams, the Superior V, an existing product, and the Superior VI, a brand new speaker technology. The Super V is reviewing the pricing strategy used to this point. Bill, a recent graduate with a degree in economics, is insistent that they should price the speakers to maximize profits. He explains, "It is basic economics-companies price their products to maximize products. There's no question-this is the strategy that we should take." Farrah, remembering what she learned in her marketing courses, isn't so sure that Bill is on the right track. The technical specifications of the Superior VI speakers have been worked out, but the team is struggling with pricing. Some members of the group think that the speakers should be priced higher than the Superior V, while others are arguing for a lower price.
-Discussion proceeds to pricing of the Superior VI.What are Superior's options in pricing this new product?

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Definitions:

Democracy

A form of government in which power is vested in the hands of the people, either directly or through elected representatives.

Proportion

A mathematical concept describing the relationship between part of a whole and another part or between one part and the whole.

Social Inequality

The existence of unequal opportunities and rewards for different social positions or statuses within society.

Industrialized Countries

Nations characterized by a significant level of industrialization, with a major portion of the economy based on manufacturing and services.