Report Title: Pricing A Pinta Date: 13/05/02 Introduction This Report

2173 words - 9 pages

Report Title: Pricing a Pinta Date: 13/05/02 INTRODUCTION This report is intended to give the readers an insight into the pricing theories and why they are used by firms, in the report, issues such as factors influencing the price of milk from farmers' perspectives and the battle between the doorstep milk delivery service and supermarkets are highlighted. Also the role the Milk Marque is questioned and analysed.1.0 TERMS OF REFRENCE This report is concerned with factors that influence pricing decisions; the report is based upon a case study called "Pricing a Pinta", but one is required to carry out research and present genuine information in the report.2.0 PROCEDURE In order to find the information needed to complete this report successfully, the methods that were adopted were: 2.1 Internet research 2.2 Marketing textbooks 2.3 Introduction to marketing case studies book 3.0 FINDINGS 3.1 Internal and external; factors affecting the price of milk for the farmers point of view.3.1.1 Internal factors From the farmers' perspectives, there are many internal as well as external factors that influence the price of milk, the internal ones include supplying food and shelter for the cows used to supply the milk, during the summer period cows consume grass, however, during the winter, farmers need to purchase food for their cattle as well as arrange a suitable shelters for the animals.Also the cow's health is important to the farmers, according to the Agricultural department, a farmer pays an average £44 a year on vet's cost per cow, also hygiene factors must be considered by farmers adding to the variable costs sustained by the farmers.It is also worth mentioning that some farmers employ workers which will also affect the cost of production of milk.The farmer has to consider the breeding costs and buying the cows which is a major chunk of the farmers' cost, all of the mentioned factors contribute to high costs incurred by the farmer and therefore the farmer will need to sell the milk at a high price to make a profit, even if it is insignificant as the farmer needs the profit to survive.To keep the price of milk down the government offers subsidies to farmers, such subsidies can also be considered as external factors, but since they have an immediate impact on the cost of production, it can also be counted as an internal factor.3.1.2 External factors There are various the external factors that influence the price of milk from the farmers' perspectives including the actual demand for milk; recent surveys show that the demand for milk is declining slightly as milk is widely perceived as a boring commodity. However, The Dairy Council has been running a campaign called "the white stuff", the aim of the campaign is to boost the level of demand for milk by highlighting its benefits, and the campaign was indorsed by many celebrities including Prince Naseem Hamed, George Best and Chris Eubank.Also supermarket and dairies have great negotiation and bargaining...

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