Question: Part 1: Review Questions

1. Explain why the price of a good or service must be high enough to cover per unit costs, at least in the long term, but cannot exceed its value as perceived by the customer.

2. A key concept in setting a price is the notion of perceived value. An essential purpose of the price set by a marketing manager should be to enable the firm to capture a fair share of the value of the product as perceived by the intended customer. Do you agree or disagree with these statements? Explain your position.

3. Choose an airline and decide if they have strong or weak perceived value. Defend your answer.

4. While speed to market is important in today's fast-paced business climate, bringing the right products to market and keeping them current are far more important than seeking first-mover advantage for a product that customers don't want. Explain how an airline marketing manager is challenged to keep their product(s) current.

5. By definition, a product is anything that satisfies a want or need through use, consumption, or acquisition. Using the airline industry as your frame of reference, define the product that is being offered to consumers.

Part 2: Breakeven Analysis Using Excel

As a marketing manager for a major airline, you are faced with a pricing dilemma. Your supervisor just walked into your office requesting a pricing analysis for a new route offered by Your Airlines. Using the Excel data file linked below, your challenge is to determine your breakeven point for each enplanement and maintain at least 85% capacity of the 150 seats available. Additionally, your supervisor states that price integrity must be upheld and that no tickets should be sold below $120.00 per seat. You also know that a competitor is launching the same route and pricing their tickets at $135.00 per seat. Your challenge is to reduce fixed and variable costs, offer a competitive price, and make a profit on each flight. In this part of the activity, manipulate the spreadsheet numbers to achieve profitability and prepare a rationale for your supervisor as to why you believe this action is possible. Include a copy of your edited spreadsheet table (data tab) and chart (chart tab) (either copy and paste or include screen shots) in your Microsoft Word document. You may need to save your document in landscape orientation to fit all the content onto the page. If you encounter significant difficulty in doing this, email your instructor the spreadsheet file separately.

Information related to above question is enclosed below:

Attachment:- mgmt449_act6_6_datafile_08131.rar