Apple Company has releases its new i-phone in the market with a suggested retail price of Php 35, 500. Many consumers are waiting for this model because of its unique and more advanced features. You are working as a marketing manager of the i-store, one of its dealer stores. As the marketing manager , it is your responsibility to maximize the sales and profit for four months, making sound recommendations regarding the pricing of the product. It has been observed in the 3rd week of the first month that for every Php 300 increase in the suggested retail price, 3 fewer customers will not buy the product. The proposal must be accurate in computations, and represented using a model.
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To maximize sales and profit, let's first create a model to determine the optimal pricing strategy based on the given information.
1. Define the variables:
- x: the number of Php 300 increases in the suggested retail price.
- n: the number of customers who will not buy the product due to price increases.
- p: the suggested retail price in Php.
- q: the number of customers who will buy the product.
2. Identify the relationships:
- For every Php 300 increase in the suggested retail price, 3 fewer customers will not buy the product.
- The suggested retail price (p) increases by Php 300 for every additional x.
- The number of customers who will not buy the product (n) decreases by 3 for every additional x.
- The number of customers who will buy the product (q) is equal to the total number of customers minus the number of customers who will not buy it.
3. Formulate the model:
- p = 35,500 + 300x (suggested retail price as a function of x)
- n = 3x (number of customers who will not buy the product as a function of x)
- q = Total number of customers - n
4. Determine the total number of customers in the store for each month and the corresponding sales and profit based on the suggested retail price variations.
5. Analyze the data and identify the pricing strategy with the highest sales and profit.
By using this model, you can make accurate computations and recommendations for pricing the product to maximize sales and profit. Additionally, you can utilize market research, customer feedback, and competitor analysis to further refine the pricing strategy.