MarkBrown, the Marketing Director of SWACorporation, is speaking with Jennifer Harvey, a Sales Manager of Eckener Verlag Ltd.
MARK: I have told you something about our new product -now does anyone have any questions?
JENNIFER: Could you give us some indication of cost?
MARK: Are you interested in factory gate price or unit price?
JENNIFER: Well, to tell the truth we are interested both in factory gate price and in unit price.
MARK: You know, I must admit that the selling costs for this equipment proved to be very high and that is why we had to fix the factory gate price as high as $1500.
JENNIFER: In this case the retail margin would be very low. As a matter of fact, we wanted to place a contract to purchase two thousand items.
MARK: Oh, I appreciate your interest and my company is always willing to offer a generous discount, what do you say to a 5% discount?
JENNIFER: That's not encouraging, I'm afraid. I believe the demand curve for your equipment will come down if you don't reconsider your pricing policy.
MARK: Frankly speaking, I was sure that there exists an inelastic demand for our production. We have been in the market for so long that we don't need any penetration strategy.
JENNIFER: OK, let's wait for the Leipzig Fair to reveal the state of affairs and show who is going to win in this price war. MARK: That's right, let's wait and see.