Pricing
Risk Factors
- Supply and demand: The demand for luxury handbags may fluctuate based on economic conditions.
- Competition: There are other high-end handbag brands in the market that may affect pricing.
- Economic conditions: In a recession, customers may be less willing to pay high prices for luxury items.
- Government regulations: Import tariffs may impact the cost of materials used in production.
- Target market: The target market for luxury handbags is typically affluent individuals who are willing to pay premium prices.
Pricing Objectives
- Maximize profits while maintaining a strong brand image
Pricing Worksheet
| Product/Service | Cost of Goods | Cost of Sales | Markup | Product Price | Discount |
|-----------------|--------------|--------------|--------|--------------|----------|
| Luxury Handbag | $50 | $20 | 100% | $140 | 10% |
| Leather Wallet | $10 | $5 | 75% | $22.50 | 5% |
Pricing Reflection
Upon reviewing the pricing worksheet, it appears that the pricing strategy of a 100% markup for the luxury handbag and a 75% markup for the leather wallet worked well in achieving the objective of maximizing profits. However, the discounts offered may need to be adjusted to better align with market demand and competition. In the future, I may need to consider more dynamic pricing strategies to respond to changing market conditions.