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Which of these is true about a pair of $200 designer denim jeans?
A) The manufacturer's labor to make them comprises the largest percentage of the final price, with other channel members clamoring over a mere 10 percent.
B) Everyone gets a fair cut of the final price; the marketer will be cut off from the customer unless all channel members are profitable.
C) The specialty retailers that sell them account for only 25 percent of the cost so that the jeans can benefit from demand pull.
D) The final price is only this high when there is a lack of competition among cotton producers or other suppliers.
E) The marketer of the designer denim jeans typically is not profitable for products like these.
Designer Denim Jeans
High-quality jeans marketed by notable fashion designers or brands, typically featuring unique designs, premium material, and a higher price point.
Manufacturer's Labor
Represents the work performed by workers in factories or production facilities who are directly involved in creating goods.
Channel Members
The entities involved in the distribution process that link the producer or manufacturer to the final consumer.
- Fathom the impact that external considerations, like the pricing strategies of competitors and overall market demand, have on a company's pricing choices.
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Learning Objectives
- Fathom the impact that external considerations, like the pricing strategies of competitors and overall market demand, have on a company's pricing choices.
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