Pricing Writing Assignment

Pricing strategy for Sherry Crow 's Massage Therapy Practice

The best way to help Sherry set her price per massage session is through a six step price setting illustration . First , estimate costs . Say after thorough investigation she finds that her Fixed Costs which include rent and equipment are 1000 per month . Her Variable Costs which include massage oil , soap , airtime , and internet and so on are 2000 per month In Secondly , select the pricing objective . It is either that she wants to survive , maximize profits or penetrate the market . Her plans to `give

br back to the society and make a profit ' shows that she wants to penetrate the market . Thirdly she needs to determine demand by conducting a survey and price experiments . Say from this exercise she realizes that she will , on average receive 10 customers per day . With this information it is now easy to calculate how much a unit massage session will cost her to break even . session

Now that she knows how much it costs her to administer 1 massage session , step four is to analyze competitor 's costs , prices and offers and select a pricing method . Say she finds that the competition charges 20 per session . She then adopts a price discriminating strategy for her `two different market segments . Through markup pricing she adds a 100 mark up on her...