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A summary of the market research agencys report about pricing is given below. ...

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Accounting

A summary of the market research agencys report about pricing is given below.

Product

Type

Market price* (Rs.)

Company's price to channel partner

Urban metro

Urban-small metro

state capitals

Semi-urban markets

Billing Price*

Cash Discount*

Scheme*

computer monitor

economy

8000

8200

8400

8600

9000

2%

500

premium

10000

10300

10500

11000

11000

2%

1000

*Billing price is the price at which the company bills the product to the channel partner. A cash discount applies to the billing price. The scheme is based on targets given to individual wholesaler. The market price refers to the amount at which the channel partner sells to his customer.

Q. Calculate the net landing costs of different models of Riesing Electronics and the corresponding profits for the channel partners across different markets (urban metro, urban small metro etc.). Do you see a trend here across product and market types? What do you think to be the reason behind the trend? Please assume that the wholesaler would achieve his target and take benefit of the full scheme amount.

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