Author: David J Curry

Source: Journal of Product and Brand Management, Volume 13, Number 6, 2004 , pp. 453-468(16)

Publisher: Emerald Group Publishing Limited

Abstract:

When considering a price decrease in response to competitive pressures or stagnating demand, management may ask how much additional volume must be sold at the new price to match the current profit level. This "iso-profit" pricing problem has been studied extensively for single items manufactured using one resource. This paper solves three realistic extensions of the problem: when two or more items share a resource, when multiple items share multiple resources, and when resource vendors offer quantity discounts. Findings are summarized in 12 points, many of which are counterintuitive.

Keywords: Breakeven Analysis; Profit; Pricing; Promotional Methods; Pricing Policy

Document Type: Research article

DOI: http://dx.doi.org/10.1108/10610420410560334

Publication date: 2004-06-01

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