Lipman Bottle Company

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In order to determine what product should be sold in the Albany and New York area it is important to consider the gross margin and the shipping cost. When shipping to New York, the size of this shipping bottle is not a major difference. New York will net a bigger gross margin in the larger bottle size making the difference in the shipping insignificant. According to the gross margin calculations, the most profitable in New York would be the 2 separation round or oval.

Conclusion

Mr. Lipman should enter the market in Albany and New York. His 30% profit margin is obtainable. The company would see greater success in focusing on 2 separation rounds. Although New York has additional shipping cost, the larger bottles yield a higher profit margin that would make shipping worth the additional cost. The expansion into the cosmetic and pharmaceuticals would allow Lipman Bottle Company to grow the business to the next level by focusing on specialized customized printing in 2 separations and the distribution, printing, and shipping of the larger bottles to New York. Although profit margins are important, there are many more factors to consider when determining pricing strategy. MaGrath in his 1991 article outlines 10 principles of pricing. He discusses how pricing is just part of the revenue generating strategy. One example is the close relationship of pricing strategy to the overall market share. It will be important for Lipman Bottle Company to focus on more than profit margins for longevity and success in the market place.

References

MaGrath, A. J. (1991). Ten timeless truths about pricing. The Journal of Business & Industrial Marketing, 6(3), 15. Retrieved from http://prx-herzing.lirn.net/login?url=http:// search.proquest.com.prx-herzing.lirn.net/docview/222024237?accountid=167104

Spann, M., Fischer, M., & Tellis, G. J. (2015). Skimming or penetration? strategic dynamic pricing for new products. Marketing Science, 34(2), 235. Retrieved from http://prx-herzing.lirn.net/login?url=http://search.proquest.com.prx-herzing.lirn.net /docview/1789775125?accountid=167104

Yan, R. (2008). Pricing strategy for companies with mixed online and traditional retailing distribution markets. The Journal of Product and Brand Management, 17(1), 48-56. doi:http://dx.doi.org.prx-herzing.lirn.net/10.1108/10610420810856512