Cowgirl Chocolates Essay

Marilyn Lysohir and her husband, Ross Coates st blinded Cowgirl burnt umbers located on 3rd street in Moscow, Idaho in 1997. Cowgirl Chocolates offered hot and depressed creations in three basic forms one at a time wrapped truffles, chocolate bars, and a hot caramel dessert sauce and provided various box offers such as gift boxes, collectible tins, unornamented plastic bags or gold wrappers. Truffles were avail subject in plain chocolate, mint, orange, unslaked calcium hydroxide tequila, and espresso and the chocolate bars were available in orange espresso or lime tequila crunch.Despite not paying herself a salary and occasionally bartering her art for services, the small business lines revenues of $30,000 did not come close to natural c all overing her $50,000+ in expenses. She just was not sure how to turn her award lovely products into a profitable business (Peter/Donnelly, Jr. , pp. 488-491). The fol low-toneding paragraphs are interchange on the relative merits of usi ng a cost- ground, charter-based, and competition-based pricing method in reference to Cowgirl Chocolates.Cost-based pricing is a certain marrow of everything within the business industry. When deciding on the toll of products, a company essential get-go calculate the cost expenses of the yield of the items or services. Demand-based pricing represents pricing products by demand flow. When products are in demand so the price of the items flush toilet be increased safely. But, if the demand is low then you defy to be methodical in your price increase strategy. So it is beneficial to establish alternative products just in case is extremely necessary.Demand based pricing is a policy that sets the price of a product consort to the perceived amount that customers are testamenting to pay, rather than according to the production cost (Encarta, 2009). Competition Based pricing compares products in the grocery store to your products and distinguishes whether those products give b irth an advantage over your current products. Four options that Cowgirl Chocolates could consider as outlying(prenominal) as pricing whitethorn be price lining, promotional pricing, bounteousness pricing and demand-based pricing.I would utilize demand based pricing which is a policy that sets the price of a product according to the perceived amount that customers are pull up stakesing to pay, rather than according to the production cost (Encarta, 2009). It must be recognized also that the effect on profit will be a factor there may be some(prenominal) factors other than profit influencing the selling price finish. Even taking an repetitious approach, it may be unrealistic to expect single demand estimates to be made.Sales demand forecasting is difficult and a range of demand possibilities at each possible selling price may be employ to guide management decision making (Coulthurst, 2002). Although I am not usually a chocolate eater, I do have a few recommendations that might h ave answered Marilyn in her time of decision New Market Prospect Marilyn may want to contact her mentor atDaffins Chocolates in Sharon, Pennsylvania. She could send him/her a sample of each Cowgirl Chocolate product and ask her mentors opinion if they like the product, then she could ask them if they would be willing to allow her shelf space to market her product.She could capture wholesale and a portion of the sell dollars to dump clog into her business. Repackaging I originally was going to recommended that she eliminate the multiple colour for the packaging of her products due to the cost but after looking at her website the colors are quite eye catching. I would tell her to capture much capital for her business she should concentrate on the website she has and market that a piece of music more. The website is more personable and only cost $25. 00 a month and was a third of her product gross sales she would also capture the wholesale and retail dollars.Lastly, not every one likes hot and rich products so her decision to make a mild line is a capacious decision and will help her expand her customer base. Spicy vs. Mild Cowgirl Chocolates is focused on promoting spicy chocolates, but realistically it should concentrate on a different frame as a back-up plan in the event that demand is low for the spicy version. For Cowgirl Chocolates, most competition in the industry comes from the businesses producing sweet chocolates. Cowgirl Chocolates may have an advantage on packaging and perhaps taste for the spicy chocolates but does not have an advantage on sweet chocolates. employ Inventory Wisely Marilyn needs to cut the labels that she currently has in livestock to fit the tin modifications. She already has $7000 in extra packaging & labels on hand, it is not wise to dump more money into tender labels that will cost $395 for a plate/printing die plus $152 for the new labels to be printed. She could offer packaging product in the gift boxes purchase d 3 years ago, possibly charging $1. 00 extra to try and capture the $9000 expense. This way at least she can recuperate something for inventory that has proven to be a very bad investment. Ingredients They could balance the elements that are contributing to the production cost of the chocolates and then they could balance out with their competitions. This way the company would be able to increase market demand and therefore expect an increase in profit sales as well. For the Cowgirl Chocolates, coming up with a cost-based price would mean decreasing some expenses by modifying packaging or possibly modifying their recipes and/or chocolate ingredients they use. I researched Cowgirl Chocolates and found that they have a great selection they sell tens of thousands of chocolate a year and double their sales every year.The ingredients stand alone on their own and the sauces are used by several restaurants to cook with. To her credit Marilyn has won two awards in 2010 for her chocolates. The internet and word of mouth keep her business flowing, she receives orders from all over the world including Antarctica I even joined her email list and consider on trying her chocolates. . Works Cited J. Paul Peter/James H. Donnelly, Jr, (2008), trade Management, noesis and Skills Eighth Edition. pp. 489-492, McGraw-Hill Companies, Inc. J. Paul Peter/James H. Donnelly, Jr, (2008), Marketing Management, Knowledge and Skills Eighth Edition.Retrieved from online. pcdi. com, BM350_Assignment_08 McGraw-Hill Companies, Inc. http//online. pcdi. com/ec/crs/cntentItem. learn? CourseID=2901074&47=6493555&dt=8%2F15%2) . Demand-based pricing interpretation Dictionary Encarta, 2009 http//encarta. msn. com/dictionary_561538482/demand-based_pricing. html Demand-based pricing definition Niguel Coulthurst 03 Apr 2002 http//www. accaglobal. com/students/student_accountant/archive/2002/25/404831 Cowgirl Chocolates 2009 Cowgirl Chocolates http//www. cowgirlchocolates. com/ of import/thankyou . shtml