Purpose:
Setting prices is a business decision that is both an art and a science. Unfortunately many small business owners set prices without enough information about their cost of operation s and their customers. Research shows that proper pricing strategies have far greater impact on a companys profits than corresponding increase in unit volume and reductions in fixed or variable costs. Setting prices too high drives customers away, but prices that are too low (a common tendency for entrepreneurs) robs a business of its ability to generate a profit, creates the impression that the products and services are of inferior quality, and threatens long-term success.
For this assignment, you will discuss the relationships among pricing, image, competition, and value (Learning Objective 1), and describe the impact of credit on pricing (Learning Objective 4).
Writing in your journal will help you retain the material, improve your critical thinking skills and reflect on what you learn. You will also receive individual feedback from the instructor to guide your progress in this course.
Directions:
Please choose ONE of the questions below from this module and write at least a two (2) paragraph journal entry that reflects your understanding of this topic. Incorporate the terms, concepts and methodologies from your reading assignments that are applicable to your reflection. Sound critical thinking involves evaluating various points of view and then establishing your own understanding. First, gather information, evaluate the legitimacy of the arguments, paraphrase the evidence you used to form your position using your own words (remember citations if you quote a source), and finally establish and explain your position on this topic.
Before posting your entry make sure it is grammar and spell checked. You are strongly encouraged to look at the grading rubric below to see how your entry will be scored.
Your journal entries will be private and only your instructor will have access.
Module 3 Journal Questions:
According to the textbook, what are the most competitive factors a small firm considers when establishing prices? [List at least five (5).]
List at least three (3) benefits a small business receives by offering customers credit?
Essentials of Entrepreneurship and Small Business Management, 9th edition
By: Norman M Scarborough Jeffrey R. Cornwall
Publisher: Pearson
ISBN: 8220117025624
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