Assignment 3: Price Discrimination Memo (Weight: 15%) Due by Sunday, midnight of Week 7

Your Assignment

Your boss has just given you an important, high priority assignment. The company’s core business product has shown steadily shrinking profitability and you’ve been asked to address the problem by coming up with at least one new pricing technique. Prior to the meeting, your boss would like to see a brief Memo that outlines your proposal and explains the impact it will have on units sold and profits.

Instructions

Develop a Memo of 2 to 3 pages for your boss. As a Memo is a succinct business communication, it is helpful to work through your ideas before writing the document. When you are ready, use the Sample Outline provided at the end of the Instructions to structure your assignment document.

1. Describe the company’s product or service, using relevant economic terminology. Questions to address include, but are not limited to:

• What is the product or service? What Utility or benefit does it provide to the consumer?

• What is your company’s history with this product or service?

• What does the competition in the market look like for this product or service?

• What actions has your company taken to remain competitive?

2. Provide at least two specific proposals for price discrimination:

• Which Price Discrimination technique(s) will you use?

• What is the current price? What will be the new price?

3. Explain how implementing your proposal is expected to impact consumer demand:

• How will your proposal impact sales in the first three months?

• How will your proposal impact sales within eighteen months?

• What would increased sales enable the company to do differently?

JWI 515: Managerial Economics Academic Submissions and Evaluation

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 515 – Assignment 3 (1198) Page 2 of 5

Professional Formatting Requirements

Your assignment should follow these formatting requirements:

• Typed, double-spaced, professional font (size 10-12), include headings and subheadings, with one-inch margins on all sides

• In place of a Cover Page, provide the following heading at the top of Page One of your Memo: Ø TO: Insert Professor’s Name Ø FROM: Insert Your Name Ø DATE: Insert Date Submitted Ø RE: Managerial Economics 515 – Assignment 3 –Price Discrimination Memo

• Include a References page that enables the reader to locate original sources. Application and analysis of

course materials and resources are expected, and additional research is welcome

• The References page is not included in the required length

JWI 515: Managerial Economics Academic Submissions and Evaluation

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. JWI 515 – Assignment 3 (1198) Page 3 of 5

Price Discrimination Memo – Sample Outline

Use the following Outline of sections to organize the body of your Memo. Use the underlined headings as section headings in your memo. Use the prompts in each section to make sure you include the required content.

TO: Your Instructor FROM: Your Name DATE: Submittal Date RE: Managerial Economics 515 – Assignment 3 – Price Discrimination Memo

Introduction

Describe the contents of the memo

Product or Service

Briefly describe your product or service. (Address the following)

What utility or benefit does it provide to consumers?

Has your company offered this product or service in the past?

Which competitors offer the same or similar products or services in the market?

How has you company tried to stay competitive in the past?

Price Discrimination Proposals

Briefly describe one price discrimination technique that you will use. (Address the following)

What is the current price? What will the new price be?

How will this technique generate more profits?

Briefly describe a second price discrimination technique that you will use. (Address the following)

Answer the same questions as above for this technique

Impacts on Consumer Demand

Explain and quantify how your proposal will impact sales within the first three months

Explain and quantify how your proposal will impact sales within eighteen months

What could the company do differently, as a result of the increased sales?

Conclusion

References