Pricing strategy

My group and I determined how we priced our sock penguins by evaluating how scarce and expensive the black socks for our penguins were. We did this so we could make a bigger profit and not lose money. Our cost production was $30 meaning that we spent all our money on the buying of resources. This meant that if we were not starting with any money left over, we would have to raise our selling price to make at least some profit. This pricing strategy did work for our business, and we were able to make more profit than loss. When we were evaluating how scarce and expensive the black socks were to create our product, we were able to make a marketing plan and analysis to improve our profit rates. This was a very smart way to find out if our selling price for the sock penguins was efficient and fundable.

For the baubles, we decided to make the price cheaper since we had competition with other businesses who were selling ornaments. When we found out how much other businesses were selling their Christmas ornaments for, we lowered our price to beat there’s so we could advertise our baubles for a lower price than other businesses. We had to do this so our business would attract more consumers who do not make impulsive purchases based on look or advertising and purely based on price. The cost per unit to make the baubles was $0.67 due to our homes having a lot of resources we could use for free. Our pricing strategy just relied on beating other prices and competing against other businesses. Our business was known as the business that has the cheapest prices for ornaments attracting more consumers. We also relied on psychological pricing. We priced our baubles at $2.99 to make it seem that having our prince 1 away from $3.00 is a much better deal. Our pricing strategy for the baubles did make a high amount of profit.

Challenges

One challenge my group and I had to face was that we did not have a lot of rice or black socks. If our money wasn’t so scarce I think we would have produced more products and make more profit due to our business selling out of sock penguins. I would’ve also changed the quality of each product to make them better and more fit to be sold. Another challenge we had to overcome was the last minute arrangement that every business had to follow changing every price of our product to a whole number. It was very challenging to change all of our posters and excel spreadsheets because of this issue.

Idea process

We came up with the idea of sock penguins and baubles due to the baubles being already brought and unused in my home. This was our first idea generated due to having all of the materiel’s. Our second product was harder to come up with due to not specialising in the making of the product. In the end we came up with the conclusion that sock penguins and baubles would go really well together and be a perfect choice for a Christmas market. We than began brainstorming the materials needed to make baubles and the spreadsheet determining our profit, loss and costs.

Conclusion

The Christmas market was a success and my business was able to make $135 in profit. This outcome was amazing and if given the chance to do this market again I would not due to how successful it was. My group and I communicated well throughout the whole assessment. We worked together very well and we were very structured in how we used our time beneficially.