Total Monetary Sales Essay Example | Topics and Well Written Essays - 250 words

Total Monetary Sales - Essay Example However, the higher prices have resulted in sales decline in terms of volume; therefore, the real sales have decreased as an outcome. In other words, the company is losing its market share. Using given information, it should be highlighted that the product line has relatively inelastic demand; therefore, the increase in prices leads to less than proportional decrease in demand. Also, it should be argued that the net marketing contribution is stable because price hikes also raise company’s profit margin, which then enable the firm to assimilate losses from decrease in sales volume. Nevertheless, the firm has increased product’s market price due to surge in costs of doing business and subsequently the inflation. However, the cost structure and pricing strategy should be brought in-line because there is reasonable room to reduce market prices. For instance, it would be better to use competitive pricing strategy, after analyzing prices of substitute products, to tempt maxim um customers towards company’s market offerings. In this way, the rationalization of market prices will help enhancing sales volume and consequently the market share. This may probably lead to increase in marketing contribution if demand increases by more than proportional decrease in prices.