Keep Driving
0422 Marketing Principles
TOPIC OR UNIT OF STUDY
Pricing and Product Branding
CONTENT STANDARD(S) AND OBJECTIVE(S)
 Describe factors used by marketers to position products/services – Activity #2 & 3
 Explain the nature of product/service branding – Activity #2 & 5
 Explain the nature of corporate branding - Activity #2 & 5
 Explain the nature and scope of the pricing function – Discussion & Activity #2, 3, & 4
 Explain the use of technology in the pricing function– Discussion & Activity #2, 3, & 4
 Describe the role of business ethics in pricing - Activity #1 & 2
 Explain the legal considerations for pricing – Activity #1 & 2
 Explain factors affecting pricing decisions Discussion & Activity #2, 3, & 4
INTRODUCTION
How many of you have bought a pair of Nike tennis shoes instead of a no name brand? Why did you do
this? Why would you be willing to pay more for one item than for another?
Company’s determine their pricing strategy based on the market they are targeting. There are many
marketing strategies that company’s use. In this lesson we will learn some of the legal and ethical
considerations for pricing strategies, and who companies use them. We will also learn about product
branding and logos. Our practice exercises will be centered on automobile products.
ESSENTIAL QUESTION
How do companies decide what pricing strategy to use, and how do they develop brand marketing?
INTEGRATION OF ACADEMICS, TECHNOLOGY, ENTREPRENEURSHIP
To complete this project, students will use basic terms and concepts, to complete the following
academic, technology, and entrepreneurship activities:
1. Academic activities – textbook review, website research, critical thinking and writing skills;
2. Technology activities – website research, online game, use of MOS Word & tables;
3. Entrepreneurship activities – building price strategy plan, determining corporate product
placement.
STUDENT INVOLVEMENT IN PLANNING PROCESS
Student involvement in planning consists of class discussion to review projects, helping with student
grouping, and choosing the websites they will use when completing research.
TASK(S)
 Discuss essential question and introduction
15 min
 Define MSRP and complete Activity #1, then discuss legal & ethical issues
30 min
 Review related material in the textbook
25 min
 Evaluate your existing knowledge with Activity#2 – KWL worksheet
20 min
 Examine websites in Activity#3 & complete Own or Lease worksheet
120 min
 Presentation by each group to instructor during Activity# 4 on Own/Lease worksheet
 Construct a pricing policy in Activity #4 - Pricing Strategy Practice
90 min
 Play brand game in Activity #5 & do worksheet, then discuss,
90 min
 Complete Activity #2 & 5 and wrap up this unit with class discussion
90 min
RESOURCES
Websites
www.edmunds.com,
www.carpoints.msn.com,
www.intellichoice.com,
www.carwizard.com
www.cadillac.com
http://www.sporcle.com/games/g/corplogos2
Armstrong, Gary, and Kotler,Philip, “Marketing, An Introduction” Prentice Hall 2000
TECHNOLOGY USE
Computers, Websites as listed above, Word software, and Microsoft Office PowerPoint software.
EVALUATION
#1 - What is MSRP worksheet
4 pts
#2 – KWL worksheet
12 pts
#3 - Getting a New Automobile – Own or Lease worksheet
28 pts
#4 - Pricing Strategy Practice paper
18 pts
#5 - Do YOU know Brand Marketing worksheet
47 pts
Total points for these activities
109 pts
Authentic assessments will be evaluated with the rubrics that are located on each activity
TIMELINE
Block scheduling-6 days, periods-12 days. This includes time for lecture, textbook readings, and
discussions. Depending on student’s ability, extended time may be needed on some projects.
Day 1 – Start project with discussion, complete Activities 1 & 2
90 min
Day 2 – Start Activity 3 with project direction
90 min
Day 3 – Group students & Finish Activity 3
90 min
Day 4 – Meet with student groups for Activity #3 while other s work on Activity #4
90 min
Day 5 – Intro Activity #5 with online game (30 min) then start worksheet
90 min
Day 6 – Finish Activity#5 (30 min), Finish L column of Activity#2 (30 min), wrap up
90 min
CONCLUSION
After the final activity is completed, students will participate in group discussion will as a wrap-up of the
project. This will help students internalize their understanding of MSRP and legal issues regarding
pricing. They will also show their understanding of pricing strategies and brand marketing.
What is MSRP?
____ of 4 pts
Have you ever heard of MSRP? It has to do with automobiles. Choose an automobile and a
record the MSRP and other information below:
Make: __________________________________________
Model: _________________________________________
MSRP: __________________________________________
Source: __________________________________________
Unethical Price Vocabulary:
Resale Price Maintenance - Manufacturers can suggest a retail price to dealers. A
manufacturer cannot require a dealer to charge a specified retail price for its product. If they
do it is called Resale Price Maintenance and it is illegal.
Predatory Pricing - Predatory Pricing is also illegal; this is selling below cost with the intention
of destroying the competition. The federal government requires sellers to price fix. This means
sellers must make prices without talking to the competition.
Deceptive Pricing - Deceptive Pricing is when a seller offers prices or savings that are not
actually available. This occurs when sellers set an artificially high “regular” price then
announces “sale” prices that are actually close to everyday prices.
Keep these unethical and illegal pricing strategies in mind for the following activities.
KWL
_____ of 12 pts
After reviewing the related section in the textbook, complete this worksheet to help you realize
what you already Know, what you Want to know, and what have Learned at the end.
K – list what you Know about this topic, W – list what you Want to know about this topic, L –
list what you have Learned at the end of the project (give page #s or Activitys that helped you learn)
Topic
K
W
L
1-What factors are
used by marketers to
position products/
services
2-What is the nature
of product/service
branding
3-What is the nature
of corporate branding
4-What is the nature
and scope of the
pricing function
5-What is the use of
technology in the
pricing function
6-What is the role of
business ethics in
pricing
7-What are some
legal considerations
for pricing
8-What are factors
affecting pricing
decisions
½ pt per block = 12 points
Getting a New Automobile – Own or Lease?
_____ of 28 pts
America still has its love affair going with the automobile. However, owning this piece of the
American dream may not be the answer it once was. Today, especially in larger cities, you can
hear the advice, “don’t buy a new car-lease it,” and more and more consumers are heeding this
advice. Leasing began with company fleet cars and a few more exotic imports. Today, almost
all car brands and models are available through some form of lease plan. If consumers know
that new car prices are holding steady or declining, interest rates are falling, and family incomes
are increasing, why would they increasingly view leasing as an attractive option? The answer
might lie in pricing and pricing strategy.
Many buyers are finding that a car that can be purchased outright for $600 a month can be
leased for $490 a month. Now that catches the eye! Consumers are also beginning to
understand leasing better than before, debunking many myths and taboos associated with
leasing. The myth of higher prices, hard to understand contracts, hidden costs, early
termination fees, and difficulties with mileage overages are all being resolved or put into proper
perspective.
Examine the following Websites for more information on leasing to help you complete this
worksheet: www.edmunds.com, www.carpoints.msn.com, www.intellichoice.com, and
www.carwizard.com.
1. What are some major advantages/disadvantages of leasing versus owning a car? (10 pts)
Leasing
Owning
Advantages
Disadvantages
Advantages
Disadvantages
1
1
1
1
2
2
2
2
3
3
3
3
4
4
4
4
5
5
5
5
2. From the websites you visited what can you determine about the car manufacturers pricing
strategies with respect to ownership and leasing? (3 pts-refer to specific pricing strategies for each)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
3. How would leasing impact the used car business? The rental car business? (2 pts ea=4pts)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
4. With respect to leasing what pricing strategies seem to be the most appropriate? Why? (2 pts)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
5. Working with a partner, assume that you both are car dealers that offer new and used car
sales and leasing options. The oldest person will create a pricing strategy for car ownership.
The younger partner will create a pricing strategy for leasing. Take into account the internal
and external factors that should be considered in developing good strategy decisions. List
details of each strategy below, then explain your strategies to your instructor.
(9 pts)
Details
Ownership Pricing Strategy
(___ of 2 pts)
Details
Leasing Pricing Strategy
(___ of 2 pts)
Internal Factors
(___ of 2 pts) Internal Factors
(___ of 2 pts)
External Factors
(___ of 2 pts)
External Factors
(___ of 2 pts)
Explanation to Instructor
(___ of 3 pts)
Explanation to Instructor
(___ of 3 pts)
Pricing Strategy Practice
While the instructor is listening to the pricing strategies for other groups work on the following:
____ of 18 pts
Some say the lease option is no longer a trend, but is indeed a fact. It has been estimated that
as much as 1/3 of all new cars will be leased rather than owned. Many consumers now choose
to put their hard earned money into more permanent assets such as houses. Consumers are
more money wise than ever before and the present value of money is a seri ous consideration
for most budget conscious consumers. To many car shoppers, making a huge down payment
(often as much as $10,000) to keep payments low no longer seems to make sense. If car leasing
continues to increase in popularity, watch for leasing as it expands into other areas.
(computers, home entertainment systems, children’s furniture, and major appliances). Assume
you are the marketing manager for a Cadillac distributor (www.cadillac.com). Construct a
policy that clearly separates the sale and lease options.
Consider the following:
What pricing strategies would you choose to apply to the two options? What types of
customers would you try to move toward the two options? How would you contact them?
How would you separate them once they come to your distribution center (car lot)? What
types of web policies would you use to reach customers who shop online? Under which option
would have the most local control over pricing and why?
Type a paper on your strategy after reviewing the following rubric:
Description
3 Points
2 Points
Grammar and No mistakes in spelling 1-4 mistakes in spelling
Spelling
or grammar
or grammar
Description of fully describes pricing
uses a brief description
strategy
strategy & details
(1 sentence) for pricing
(more than 2
strategy
sentences)
Types of
fully describes a
briefly describes a
customers
customer type for each customer type for each
option
option
Contacting & fully developed plan to briefly discuss contact
separating
contact customers &
plan & lot separation
customers
separate on lot
Web policies
fully developed online fully developed online
for online
webpage plan with
webpage plan but no
shoppers
policies
policies
Local pricing
explained pricing
fully discussed the best
control
control for each plan
plan for pricing control
and which would have with explanation (but
more local control
only on one option)
Total Points
1 Points
Earned
5 or more
mistakes
makes no
description of
specifics in pricing
strategy
describes 1 type of
customer not one
for each option
fully discuss
contact OR
separation plan
partially
developed web
page plan
listed best option
for local pricing
control but little
explanation
_____ of 18 pts
Do YOU know Brand Marketing?
____ of 47 pts
1. Play the logo ID game on the following website
(8 pts total)
http://www.sporcle.com/games/g/corplogos2
Tell me 3 that you knew _____________________________________________________ (3 pts)
______________________________________________________________________________
Tell me 3 that you could not guess. ____________________________________________ (3 pts)
______________________________________________________________________________
Tell me how many you could guess. ____________________________________________ (2 pts)
______________________________________________________________________________
2. Look at each SUV make and model listed below. Research the details of each make and
model to help you answer these questions:
(2 pts per answer if detailed, 1pt if less than detailed)
Automobile
Mitsubishi
Outlander
Sport
Chevy Tahoe
Toyota RAV4
Buick Enclave
Cadillac
Escalade
Dodge
Durango
Make Branding (i.e. Ford)
Model (i.e. F350)
Who do think typically buy this brand?
Who is the company trying to target?
Pts
4ea
Ford Explorer
GMC Yukon
Honda CRV
Total Points for chart _____ of 36 pts
3. Do you think that the Brand is trying to change its image or target market through it’s SUVs?
Explain why or why not.
(3 pts – if fully explained)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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