Question

Please explain these 3 question on NIKE on their sensitive , revenue value quality prestige etc

• How sensitive are your customers to changes in price?
• What revenue do you need to break even and achieve profitability?

• What does the price say about your product in terms of value, quality, prestige, etc.

Answer 1

1) The price response of consumers is the degree to which quality influences their willingness to buy the product or service. Price sensitivity is usually calculated by market price elasticity.Consumers compare items. They will have a reference price with which they will use to benchmark the purchase.Most possibly, even the easiest transactions are followed by an implicit comparison of the options and the quality of this option.Both goods are substitutes but some are more apparent than others.. The better the commodity relates to competitors, the greater the market response would be.Consumers' sense of fairness has a major impact on their market response. Generally, unfairness arises from different patterns of price discrimination, or inequality in general, which is not inherently a negative thing because these activities render a core component of income maximization.

2)Business owners use several financial management methods to grasp their market performance and take the appropriate steps. One such technique is to locate the break-even stage, which specifically defines how much revenues are needed to offset expenses and commence earnings from bookings.In other terms, the break-even point is the amount of profits at which the net income produced is equivalent to the total expense, which implies that the profit at a company's break-even point is zero. The break-even point allows small business owners and businessmen to fix their commodity rates as well as to calculate costs-volume-profit.

3)Prestige pricing is where a business higher sells its goods to offer customers the impression that the commodity is of high value.This pricing approach is strongly related to awareness of the company. Industries using this path to pricing also provide goods that are known for their outstanding output that bring value to customer's lives.The pricing approach operates under the premise that if the commodity is priced large, buyers find greater interest in the product, and are able to pay a higher price for it.Nike with celebrity endorsers (e.g., Michael Jordan, Serena Williams, etc.) and their well-recognized emblem, Nike is selling its items based on their brand identity.If customers love a brand and value its image, premium pricing really does boost the revenue as it reflects how good the product is.