The case is about a research that Diana Kelly carried out to establish the appropriate pricing

methods that she can use for a new product launch. She intends to distribute the product in
various retail stores such as Target, CVS, Walmart, and Walgreens. Kelly conducts research
to develop and create a pricing strategy though she discovers that there is price discrimination
for goods sold to women. In the world today certain products sold to women tend to attract
high prices in comparison to similar products being sold to men. This creates gender-based
price discrimination and seems to be a problem in the determination of how Kelly intends to
sell the new cream product.

Key Issues
Through a market research conducted by Kelly convinced her that there was a need for the
new product in the market. Additionally, she believed that it generate a lot of consumer
excitement and invigorate the foot ware market. She conducted tests on the products and was
certain that it increase consumer traffic to foot care market. However, through the research,
she realized that certain issues needed to be addressed first. For instance, would price
discrimination work for her product. In the market products, she found out that certain
products were priced based on the genders yet they offer similar satisfaction to the consumers
who purchase them. For example, toys are pink color had higher prices than those of other
colors. Secondly, the line of reasoning that would support price discrimination was also an
issue that can be identified in the case. If Kelly was going to use price discrimination for the
new product, she ought to have reasons that would support it to foster more consumers to buy
the product. Thirdly, would price discrimination help her company maximize profits is an
issue to her. Firms always intend to maximize their shareholder's wealth and profits but for
Kelly to maximize she ought to considernher price strategy carefully so as to sell more of the
new product . Another factor that she needed to consider so as to price the nail brightening
cream was also an issue. For instance, how she was going to package the product was a
crucial factor to consider when pricing the product. Through the market research, Kelly was
able to determine that some products being offered by different companies differed on their
prices due to how they have been packaged yet they provide the same satisfaction they are
intended to offer to their consumers. Was price discrimination ethical? Was another issue that
the case tries to addressed. Many people today consider gender price discrimination as sexist
since it majorly affects women products which are relatively overpriced especially those
products that are pink in color. Therefore Kelly needed to consider her pricing options
carefully in that it does discriminate women and at the same time it does ensure that the
company maximizes profits.

Analysis and Evaluation

According to Het, the price of products determines immensely how a product will fair on in a
market. Price discrimination is a critical issue which the case tries to address through Kelly's
market research which unearths how products prices differ in similar products that sold to
women and men. Kelly is faced with a difficult task of deciding if her new product should be
priced based on gender and whether her company should charge a higher price to women that
can be considered as gender price discrimination. According to the case, adult clothing had a
price difference of 8% for instance, Levis 501s being priced $88 for women and $68 for men.
Such price difference is considered to be ‘sexist pricing.' Besides the case pinpoints that some
home healthcare product had an 8% price difference. Kelly looked at her product simplified
cost structure that involves a product material cost of 84 cents per unit. This structure is
enforced to create a gender specific product concerning its packaging. The new nail
brightening cream has potential paths to pricing. The company can create gender specific
packaging, packaging materials and color schemes that can be obtained at affordable costs
thus will enable the company to lower its prices. Apart from that, the product has strengths,
weaknesses, threats and opportunities that it needs to consider before pricing the new nail
brightening cream. For example, the products have the capability of generating consumer
excitement and invigorate foot care market. Besides, the product has a unique target market.
The only weakness that can affect the product is the price difference. The company has the
opportunity of capitalizing on the seasonality of the foot care products that usually occurs late
spring and summer whereby the sales of these products tend to be high. The threat of
competition from new entrants and existing companies still poses a great challenge to the
company thus it would need to consider carefully on the pricing strategies it needs to enforce
for the new product

Recommendation
Kelly needs to consider carefully on the pricing options she intends to use. First company
needs to package the product in a cost effective manner. The company can outsource
packaging services from Mexico which is relatively cheaper than Spain. This would lower the
packaging
material cost that the business may incur. The company should use price discrimination on
this
product. The product needs to be female-centric. The product should be launched in late
spring and summer so as to maximize its sales. Kelly needs to consider viable transportation
and branding strategies it intends to use so as to price the products. Besides, it should select
well the retails shops that it wants the products to be distributed to since the through her
market research she found out that retails sell similar products at different price rates. She
should consider the rate and level of competition before pricing the product. Conclusively,
the new product has the potential to thrive in the market since it focusing on a unique target
market. The company should consider well whether it needs to use price discrimination as it
can raise gender related issues. The price of the product should merely be based on the
packaging material cost, transportation cost that the company will incur and its intended sales
forecasts.