Assignment #13: Root Candles

1. Using the factors identified by marketing researchers that

influence price sensitivity, explain why U.S. consumers are not
overly price sensitive when it comes to buying candles.
U.S. consumers are not overly price sensitive when comes to buying candles
because the number one priority for consumers is scent and color, then
design and packaging, then lastly price. Consumers who purchase the candle
in regards to the scent and color want the candle to be warm and inviting,
and to match the décor of the home. Those who purchase the candle for the
design and packaging typically give them as gifts, so it is necessary and very
important for the physical appeal of the candle to be aesthetically pleasing.
Another reason consumers are not overly price sensitive when it comes to

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buying candles could be attributed to the fact that there is competition in the

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candle industry, meaning prices would be nearly the same for all candles

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because there are few barriers for entry and exit in the market.

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2. What other pricing methods could Root Candles realistically use
to price its candles? rs e
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Instead of just looking at production costs, Root Candles can also
realistically use consumer perception of the product/brand to price its
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candles. If Root Candles markets their candles as the best due to quality of
the wax and the long-lasting of the wick, then consumers can justify the
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higher price with the increased quality of the product. If Root Candles
concentrates their marketing effort on the quality of their candles and their
brand image, then consumers would be more apt to buy the candles
regardless of the price hike.
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3. How might Root escape the price-cost pressures it is

experiencing with votives?
Root Candles can escape the price-cost pressures experienced with votives
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by finding a substitute for the paraffin wax. Like the video explained, paraffin
wax is made from refining petroleum, which has been increasing over the
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years. This increases the cost of production, meaning the marginal revenue
is decreased, which makes profit decrease as well. If Root Candles finds an
alternative and cheaper source for the wax, then costs for production could
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potentially be lowered. Perhaps instead of using paraffin wax, Root Candles

can use beeswax instead, assuming the cost of production is cheaper. Root
Candles can also offer smaller sizes for their candles and sell them at a price
lower than their current candles but with a higher margin of profit. Most
consumers would not bother to calculate which candle has more value, and

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 would generally pick the candle that is cheaper or better suits their
preference.

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