Question

Marketing Nancy is the sales manager of the shoe store. The owner has told

ner that she must set a price that allows the store to sell at least 50 pairs of
running shoes next month. What price should she set? If another local store
has a big sale and lowers its price for running shoes by 25 percent, will
Nancy's employer reach the sales goal? Why or why not?

Answer 1

Nancy's pricing strategy must account for the store's goals and market factors, possibly requiring adjustments if local competition intensifies.

Step-by-step explanation:

The scenario with Marketing Nancy as the sales manager of a shoe store involves determining the right pricing strategy for selling running shoes and the potential impact of competitive pricing actions (e.g., a local store's big sale) on meeting a sales goal. Nancy must consider various market factors as well as the store's costs and desired profit margins to set a price that sells at least 50 pairs of running shoes next month. This decision-making process reflects microeconomic principles, which also apply to other business scenarios such as a t-shirt company pricing their products, and a small firm considering entering a market dominated by a monopolist. If a local competitor reduces prices by 25%, Nancy's store may have to reassess its pricing or value proposition to reach the sales target, potentially engaging in competitive pricing strategies or promotional activities to maintain market share.

Answer 2

In order to complete the target of selling 50 pairs of shoes, Nancy should keep the price of shoes below $60. If another local store

has a big sale and lowers its price for running shoes by 25 percent, Nancy's employer will find it difficult to reach the sales goal.

Explanation:

• The person who is dealing in a certain commodity has to intelligently devise how many customers is he able to attract for a given price of the commodity. Keeping in mind what the target is, he should then declare the prices of commodities to attract the expected number of customers.
• If another seller in the same area is selling the same commodities at a discounted price, it naturally tends to affect the sale of the other players in the market as the flow of customers gets diverted.