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State the Penetration pricing
As opposed to the skimming pricing the objective of penetration pricing is to gain a foothold in a highly competitive market. The objective of this pricing method is market share or market penetration. Here the firm prices its product lower than the others do in competition. This method delivers results in the following situation:
When the size of the market is large and it is a growing market.
When customer loyalty is not high customers have been buying the existing brands more because of habit rather than any specific preferences for it.
When the market is characterized by intensive competition,
When the firm uses it as an entry strategy,
Where price quality association is weak.
Significance points of Variance The following significant points must be kept in mind: Controllability: Controllability should also influence the decision whether t
What is Cost unit While the cost centres assists in ascertaining costs by location, person, equipment, operation or process, cost unit is a unit of product, service or a combin
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What are Direct expanses These are expanses which can be directly, conveniently and wholly allocated to a specific cost centres or cost units examples of such expanses are hir
The Value Chain and Cost Analysis The behavior of a firm's costs and its relative cost position stem from the value activities the firm performs in competing in an industry. A me
Intra company transfer pricing A company engaged in production may have several segments division or departments doing production jobs or manufacturing party or fully finished
What does compounding technique shows?
Hickory Company manufactures two products—14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is cons
The assignment model Consider the situation of assigning m jobs (or workers) to n machines. A job i(= 1,2,3 ...m) when assigned to machine j(= 1,2,3 ...n) acquires a cost Cij.
CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION) In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriat
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