2a) In an open market, companies must price their products based on the prices the market will bear. If a company overprices their merchandise, it is likely that no one will buy it. One market-based approach to pricing is the Target Pricing method discussed on pages 523-525 of your textbook.
Please respond to all of the following prompts:
For this discussion, you will be acting as a manager for a major manufacturing corporation. Please select one of the companies listed below for your scenario:
- Proctor & Gamble
- General Mills
- General Motors
Assume that the company you have selected is bringing a new product to market. You have been tasked with the responsibility of target pricing and target costing this new product. In your main response posting, you must do the following:
- State the company you have chosen and explain the “pretend” new product.
- Walk through the five-step process shown on pages 523-525. Explain how you’re going to address each step of the target pricing and target costing method based on the scenario you have chosen.