Download pricing project - Renton School District

Unit 8 Project
PRICING TOYS
BASIC BACKGROUND
Tri-Star Toys is introducing two new products influenced by Japanese pop culture. One is a trading card
game called Laszot. The other is a line of 12-inch stuffed animals called Mie Dolls. Each doll is supposed
to have a unique trait, such as being friendly or mischievous.
Setting a Price
Tri-Star wants your firm’s help deciding how to price these two new products. The biggest cost factor
with the trading card games is creating the stories and characters. Assume a cost of $0.25 per card
for the initial production. For the dolls, assume an initial cost of $4.50. Marketing expenses are $0.05
per trading card and $1.00 per doll. Demand for both items depends on conditions in the marketplace,
which you will need to determine.
YOUR OBJECTIVE
Your objective is to prepare an effective pricing and retail strategy for Tri-Star’s two new products.
The company wants to make a 15 percent profit off the products in the first year. You will need to
identify a price for sale to wholesalers, retailers, and e-commerce sites as well as a suggested retail
price (MSRP) for those businesses to charge their customers. Base your conclusions on research and
analysis of current market conditions.
ASSIGNMENT AND STRATEGY
1) Get the Background: To get started, you will need to conduct a situation analysis (SWOT) and
competitive assessment for these two new products made by Tri-Star Toy Company. Learn all you
can about the markets for trading cards and dolls, some of which may be collectibles.
Don’t forget about the Consumer Product Safety Commission (CPSC) www.cpsc.gov
2) Write the Pricing Proposal: Begin your proposal by reviewing the reason Tri-Star Toy Company
hired your firm.
Then provide background information you learned from your situation analysis (SWOT) and
competitive assessment.
Use your research to justify your assumptions as you go through the six steps of pricing a
product.
1. Establish pricing objectives
2. Determine costs
3. Estimate demand
4. Study Competition
5. Decide pricing strategy
6. Set Prices
3) What your project should include: Show the math you used to arrive at suggested prices for
wholesalers, retailers and ecommerce sites, as well as the suggested prices for retail customers.
Also create a table that depicts your competitive price analysis. Create other tables and figures
as needed to show relationships among data.
YOUR REPORT
You will provide a paper and present your results in a powerpoint or prezi to the executives from
Tri-Star Toys.
Suggested Outline
I.
II.
III.
IV.
V.
Introduction
A.
Client's main problem
B.
Purpose of the proposal
Background
A.
Situation analysis
B.
Competitive assessment
C.
Strategic Findings
D.
Government Regulations
E.
Suggested target markets
1.
Laszot trading card game
2.
Mie Dolls
Deciding on the Price - Six Steps & Assumptions
A.
Pricing objectives
B.
Costs
C.
Demand estimate assumptions
D.
Competition assumptions
E.
Suggested base price and pricing strategies
1.
Laszot Trading Card Game
2.
Mie Dolls
F.
Recommendations for setting actual prices
1.
For wholesalers
2.
For retailers & e-commerce businesses
3.
For resellers' customers (suggested retail price)
Bibliography
Appendix
A.
Mathematical calculations
B.
Competitive price analysis
C.
Other relevant tables and figures
UNIT 8 PRICING TOYS RUBRIC
NAMES OF TEAM MEMBERS:
1 Point
2-3 Points
4 points
Addressed a few or none
of the client’s objectives
and cost factors in
establishing prices.
Addressed some of the
client’s objectives and
cost factors in
establishing prices.
Fully addressed client’s
objectives and cost
factors in establishing
prices.
Basic understanding of
market for trading cards
and dolls.
Good understanding of
market for trading cards
and dolls and includes
examples competing
products
Included a little
information on
competitors in the
market.
Gathered additional
information on
competitors in the
market.
Included a little
information on
government laws relating
to children’s toys.
Included some
information on
government laws relating
to children’s toys.
Ability to
demonstrate the 6
steps in setting the
price.
Appropriateness of
pricing
recommendations
and corresponding
rationale.
Gave a description of the
firm’s process in setting
prices.
Somewhat addressed the
steps in setting prices.
Gave a description of the
firm’s process.
Pricing recommendations
and corresponding
rationale inappropriate
and/or not addressed.
Pricing recommendations
and corresponding
rationale somewhat
appropriate and was
addressed.
Accurate
mathematical
calculations
Not accurate.
Some accuracy.
Included mathematical
calculations.
Evidence that
research was
conducted to
support decisions
made
Organization and
continuity
Little to no research was
demonstrated.
Some research was
demonstrated.
Not very organized and
not very professional.
Somewhat organized and
professional.
Use of client’s
objectives and cost
factors in
establishing prices.
Accurate situation
analysis (SWOT)
Knowledge of the
trading card game
and doll/toy
markets
Knowledge of
governmental laws
relating to
children’s toys.
Exemplary understanding
of market for trading
cards and dolls and
includes examples of
competing brands and
products.
Provided complete
information on
competitors and provided
robust details comparing
and contrasting. Showed
evidence of research.
Complete information on
government laws related
to children’s toys and
provided example(s)
included in project for
products. Showed
evidence of research.
Fully addressed the 6
steps in setting prices.
Explained how each step
was accomplished.
Pricing recommendations
and corresponding
rationale was appropriate
to situation. Also, it was
well addressed and
supported.
Demonstrated research
and process.
Completely accurate.
Included mathematical
calculations and
competitive price
analysis.
Research was
demonstrated
thoroughly.
Very organized and
professional.
TOTAL SCORE
AVERAGE
Total Score ÷9
Self
Score
Teacher
Score