Stewart Cellars

CONCEPTS IN MARKETING
Program #112: “Pricing Products & Services - Case Study: Stuart Cellars, LLC”
Video Audio
1. Coast Learning Systems tag and The following is a college course, based on the
logo, and McGraw-Hill Irwin tag.
textbooks, "Marketing" and “Marketing: The Core,”
written by Kerwin, Berkowitz, Hartley and Rudelius
and published by McGraw-Hill/Irwin Publishers.
2. B-ROLL (MUSIC)
NARRATOR: As any business would, Stuart Cellars
wants to sell every bottle of wine it produces. The
company also needs to make a profit. To perform this
tricky balancing act, marketers must become experts in
the art and science of pricing their goods and services.
3. Program title sequence: (Series Theme)

Concepts in Marketing
Pricing Products & Services
Case Study: Stuart Cellars, LLC
4. B-ROLL (OPEN AMBIENT:
FEMALE: Hi.
MALE: Hello, how are you?
FEMALE: Just that today. I’m good. I’m so excited
to find that.
MALE: Oh, it’s on sale too.
FEMALE: That’s even better.)
NARRATOR: Companies are in business to make a

profit, and pricing their goods or services is an
important factor in achieving this goal. For example,
wine prices can fluctuate due to many different factors.
Wine makers are under enormous pressure to find the
right price for their products that will allow them to
remain competitive and make a profit.
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NARRATOR: Stuart Cellars is a family owned

boutique winery that fully understands the need for
effective pricing decisions. Marshall Stuart bought
property in Temecula, California, planted the first vines
and three years later, yielded the winery’s first vintage.
Stuart Cellars produces only twelve and a half thousand
cases of wine each year for a largely upscale target
market.
5. Previous B-ROLL continues. STUART: And a lot of people were very apprehensive
about planting higher quality, uh, red wine, red wine
STUART ON CAMERA
grapes in this area. Uh, they said that and it, it’s
LOWER THIRD:
history now but Callaway they used to have a, a theme
Marshall Stuart
Owner/Manager, Stuart Cellars, that white wine is all we make. So basically what my
LLC
main goal was, was to check the soils and find out if we
B-ROLL could actually do a red grape here in the valley that
would produce premium Bordeaux varietals.
6. B-ROLL BOMBOLA: The target market that Marshall
envisions for his product is the upper end of, uh, wine
BOMBOLA ON CAMERA
connoisseurs. The people that can afford a premium
LOWER THIRD: product at a premium price, um, and in the, in the wine
Steven Bombola community so to speak it’s probably the top ten to
Consulting General Manager,
Stuart Cellars, LLC fifteen percent of the wine purchasing public.
7. B-ROLL BOMBOLA: The wine making process starts when we
harvest the grapes. We harvest at night so the, the
grapes don’t, um, we don’t induce shock to the grapes.
We pick then we store them inside here where the
temperature’s always kept at 56 degrees. They’re then
fermented depending on the variety for whatever period
of time. They’re then crushed and then brought back
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BOMBOLA ON CAMERA inside until they reach the sugar level or the ripening
stage that Marshall wants for each different variety.
B-ROLL They’re then pressed off outside at our press and then
stored in tanks for a period of time. And then from
tanks they go into barrels and are aged anywhere from
nine to twenty four months. In the case of our ports
sometimes up to four years. We then bottle and then
they’ll bottle age for another anywhere from a month or
RETURN TO BOMBOLA ON two to fifteen to sixteen months depending on the
CAMERA
variety. So the entire process from harvest, the soonest
we have a wine available is about fourteen months to as
long as six years.
8. B-ROLL (OPEN AMBIENT:
Group discussing wines they have tasted.)
NARRATOR: Managers consider several factors

when making pricing decisions. For most
customers, making a purchase isn’t just about price,
CG: Value
it’s also about value---the perceived benefits of the
product as they relate to the price. A company
must understand the customer’s perception of
value.
9. Previous B-ROLL continues. BOMBOLA: I think it’s a fair assumption that the
value is if it costs more it’s worth more. And I
BOMBOLA ON CAMERA
think that’s in any type of, in any type of industry
with any type of product.
10. HANSON ON CAMERA HANSON: Value is perceived mainly on price, I’ll say
that. Um, also based upon what people read in
LOWER THIRD:
Cyrille Hanson magazines, trade publications have a great deal to do
Wine Broker & Distributor, Vine
with what people perceive as a value wine. So for
Tales
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B-ROLL them value is based upon what they’ve read in a trade
publication or perhaps what friends have told them
about when they go to their houses and they’re
drinking a wine and they’re saying, oh this is a great
value.
11. B-ROLL BOMBOLA: In the wine business it’s really the taste of
the product that is the ultimate factor in whether it sells or
BOMBOLA ON CAMERA it doesn’t or it’s good or it isn’t. And, and you can have a
$20 bottle of wine or a $200 bottle of wine and if the $20
tastes good that’s what you’re gonna buy.
12. B-ROLL NARRATOR: Winning awards, especially in the wine
business, can also affect the customers’ perception of
value.
13. HIRST ON CAMERA HIRST: So if something gets a 95 by the Wine
Spectator then people want that wine. I mean, we’ll
LOWER THIRD:
Diana Hirst have a wine for months and then all of a sudden it’ll get
General Manager, Hi-Time Wine a rating in the Wine Spectator and it’s like that same
Cellars
day it’s sold out. So it’s just, it, it really, really makes
B-ROLL a difference.
14. Previous B-ROLL continues. HIRST: A couple of years ago there was a wine that
got like a four-star gold medal in the Wine Spectator.
And it was, I believe it was like under $20 at the time.
HIRST ON CAMERA
And once it got the medal, for one thing, they stopped
selling it, our distributor. And then it came out about
B-ROLL
six weeks later at about 40 percent higher price. Ever
since that time people have really sought that wine out
every year. And the, the award was given like four
RETURN TO HIRST ON years ago but it still has a following ever since that
CAMERA
time. But, yeah, sometimes wineries will hold the
wines back if they find out it’s gonna get a big award
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and then raise the prices.
15. GRAPHIC: NARRATOR: Pricing goods and services, like many

Setting Prices
marketing strategies, typically begins with identifying
• Identify Objectives &
Constraints objectives and constraints.
• Estimate Demand &
Revenue
• Determine Cost, Volume, &
Profit
• Set Final Price
16. B-ROLL NARRATOR: To set prices, a company must first

establish its “pricing objectives”, the role that price will
CG: Pricing Objectives
play in its overall marketing plan. One of these
objectives may be to increase sales, which can also
increase market share. This is sometimes easier for
smaller companies. .
17. Previous B-ROLL continues. BOMBOLA: So for our particular product and our
particular vineyard and winery, our goal is to increase
our market share to where we can achieve those goals
of selling 85 to 90 percent of our product. For us to
BOMBOLA ON CAMERA increase market share even though it’s 100 percent, um,
incremental leap from selling 5,000 cases a year to
10,000 cases a year, there’s enough consuming public
out there for us to do that. Whereas if we were a Gallo
producing hundreds and hundreds and hundreds of
thousands of cases, to increase 100 percent is virtually
impossible just because you can’t absorb or the public
can’t consume that much product.
18. B-ROLL NARRATOR: Another pricing objective a company
might identify is based on unit volume, which is the
CG: Unit Volume
quantity of the product produced or sold.
19. Previous B-ROLL continues. BOMBOLA: We think we can sell more of a particular
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BOMBOLA ON CAMERA type of product at a certain level if we do lower the
price. Or if we increase the production on that product
that we’re able to sell out that 90 percent goal that we
mentioned earlier.
20. B-ROLL NARRATOR: In addition to establishing pricing
objectives, marketing managers must consider certain
CG: Pricing Constraints “pricing constraints,” factors that can influence the
prices set by a company. For example, a major pricing
constraint in the wine business is the cost of production
and marketing.
21. B-ROLL HANSON: How much is it going to cost to get a ton of
grapes? Do you own the land? If you own the land
and they’re your grapes it’s gonna cost you much less.
HANSON ON CAMERA If you have to go buy grapes from somebody else

because you don’t have enough to make the amount of
wine that you’d like to, that can make a big difference.
B-ROLL California has three of the primary growing regions
for grapes in the United States. Everything’s right in
our backyard. We don’t have to pay so much to get to
the wine or have the wine get to us.
22. Previous B-ROLL continues. BOMBOLA: You have a lot of front-end costs. Vines
last for 40 or 50 years. Once you buy all your
equipment, your machinery, its really yearly
maintenance on it. So you have a lot of outlay up front.
BOMBOLA ON CAMERA It’s probably a seven-year venture or seven-year
odyssey that you’re on before you can really recoup
those costs.
23. B-ROLL NARRATOR: When identifying constraints, customer
demand and competitors prices also become big
factors.
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24. B-ROLL BOMBOLA: We look at the competition all the time.
We see who’s coming out with what variety. What’s
being done new, where it’s been produced, what the
BOMBOLA ON CAMERA quality is, what the price is. We have different
objectives for each particular wine that, that we look at
with the same factors that we just discussed, which is,
which is the quality of the product, the, the, uh, overall
market, the other competition that we have for a
Chardonnay. Um, who’s releasing what, where, um,
what the glut or, or scarcity of the market is or scarcity
of the quality product or glut of a quality product, all
those factors come into play to try to establish that
ultimate retail price.
25. B-ROLL BOMBOLA: We do look at the competition from,
from fine wine makers if they make an exceptional
Chardonnay like Chalk Hill which is probably the
premier Chardonnay producer in the, in, in the state, if
not the country or maybe even the world. But we do
use them as a target so to speak that we want to be like
Chalk Hill in terms of the type and quality of product.
26. B-ROLL NARRATOR: There are also legal aspects of pricing
that create constraints for a company. Federal and state
laws can limit the pricing options available, and special
rules may apply to those selling alcohol.
27. Previous B-ROLL continues. HANSON: And California’s a three-tier state, which
means that it has to be imported by somebody,
HANSON ON CAMERA
distributed by somebody and then sold by somebody.
So basically a distributor or a broker cannot sell to the
general public. The general public has to purchase their
wine either through retail establishment or a restaurant
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B-ROLL establishment. So in that regard, um, I would say in
our establishment, in the retail establishment, we are
forced to at least make a six percent mark-up. We can’t
RETURN TO HANSON ON
CAMERA mark anything less than six percent.
28. GRAPHIC: NARRATOR: Another thing that managers do when
Setting Prices
setting prices is estimate demand and revenue. A
Constraints company needs to establish the consumer demand for
• Estimate Demand & it’s products.
Revenue
Profit
• Set Final Price
29. B-ROLL NARRATOR: To estimate demand, managers first

determine the number of people in the target market.
Then they consider factors that affect what these
consumers want and what they can afford. In addition
CG: Demand Factors to the price of the product, these “demand factors”
include the price and availability of competitive
products, consumer income and consumer tastes.
30. BOMBOLA ON CAMERA BOMBOLA: On some of the reds that we have, which
are now becoming, Marshall’s becoming more well
known for, we’re going to raise some of the prices on
B-ROLL
those because we feel that it’s going to warrant the
additional two or three or five dollars per bottle price.
31. B-ROLL HIRST: If something has a cult following, um, there’s
a big demand for it and usually a small supply so it
makes the prices really go up. But we have to allocate
HIRST ON CAMERA
wines to people. Like somebody will call, I mean, they
would buy everything we had, we could sell it to one
person. So we’ll only allow them to buy like a bottle or
two bottles.
Page 8
32. HANSON ON CAMERA HANSON: There are many wines out there that might
only make 400 to 1,000 cases of wine per year. And
they get very high scores in trade publications such as
Wine Spectator or Robert Parker Wine Advocate. So
B-ROLL there’s this perception of great value of ultra-premium
wine, high prices add to that, but a very low supply. So
everybody wants it. The demand is extremely high.
RETURN TO HANSON ON People are clamoring, fighting to get that wine. Now
CAMERA let’s say you have a bad year though, that is going to
dramatically affect the profit-making part of your
business essentially. ‘Cause if you have a bad year
there’s no way to make good wine out of bad grapes.
So you are basically at the whim of Mother Nature at
that point. So I think that’s probably the main
controlling factor on supply is going to be the vintage.
33. B-ROLL BOMBOLA: So for example if we have 50 percent of
our product is Chardonnay just for conversation
purposes, but we’re only able to sell 25 percent of that
ultimate end product, then we will probably sell that off
as bulk juice. Did we know that there was gonna be a
glut of Chardonnay six years ago or eight years ago
when the vine was, when the vineyard was planted?
No. Now we do. So we’ve uprooted part of the
Chardonnay and now we’re changing that for Pinot
Noir.
34. BOMBOLA ON CAMERA BOMBOLA: When the heyday of the “dot coms” was
going on and young people had money, they thought
nothing of throwing down $100 for a bottle of wine.
B-ROLL That has gone away. There’s been a glut on the

market, not only from overproduction in California, but
RETURN TO BOMBOLA ON
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CAMERA the importers coming in and trying to buy market share.
That’s been a factor. Those two are probably the
major impacts that have hit the market in terms of the
pricing and how it affects the, the vintners or the wine
makers.
35. B-ROLL HANSON: How much disposable income does
somebody have to spend on wine? What we’re seeing
right now, based on the strain on the economy, are
people are starting to flock more towards what we
would consider value wines. Wines that do fall
HANSON ON CAMERA between the five to ten dollar range. And I’d say the
economy really has a great impact on, on the demand
side.
36. B-ROLL NARRATOR: Generally, when price decreases,
quantity demanded increases. However, there are
exceptions to this rule.
37. B-ROLL HANSON: And it goes both ways actually.
Sometimes a winery will lower their price and their
sales will go down. It seems the opposite. In Japan
HANSON ON CAMERA they couldn’t sell enough Dom Perignon so they
dropped the price. And lo and behold sales plummeted.
So they finally figured out they almost doubled the
price and sales doubled. So that is a prime example of
how pricing can really affect your sales.
38. B-ROLL NARRATOR: After estimating demand, marketing
managers will be better equipped to estimate total
revenue, which is all the money a company receives
during a particular period of time from the sale of a
GRAPHIC: good or service. “Total revenue” can be calculated by
Total Revenue multiplying the price by the quantity sold. For
Price x Quantity = TR
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$10 x 10,000 = $100,000 example, if a company prices its wine at $10 a bottle,
and sells 10,000 bottles in a year, its total
revenue for that year is $100,000.
39. GRAPHIC: NARRATOR: Along with estimating demand, the
Setting Prices
pricing process also requires managers to determine
Constraints cost, volume, and profit relationships.
• Estimate Demand &
Revenue
Profit
• Set Final Price
40. B-ROLL NARRATOR: A company needs to thoroughly

understand costs when making any marketing
decisions, especially pricing. For instance, “total cost”
CG: Total Cost
represents the total amount that a company spends
when producing and marketing a product. It is the sum
CG: Fixed Cost of fixed and variable costs. “Fixed cost” doesn’t
change with the volume of the product produced. This
typically includes the cost of facilities, equipment, and
land.
41. B-ROLL BOMBOLA: Marshall bought approximately 40 acres
here. The purchase price on that property was about
$650,000. Marshall being a grading contractor brought
BOMBOLA ON CAMERA
his CAT equipment out here. We moved about
300,000 yards of earth. It’s about a dollar a yard to
B-ROLL move earth. To plant a vineyard the way he has
planted it here is about $18,000 an acre, which includes
all your infrastructure, your, your irrigation, your vines,
your trellis system, your head rails. So we’re at about a
million four before we’ve had one grape. Um, the rest
of this particular structure with the barrels, with the
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refrigeration system, with all the capital equipment we
RETURN TO BOMBOLA ON have outside, is probably another $650 to $700,000. So
CAMERA
we’re into it just hard cost about $2 million for this
particular 30 acres plus the facilities you see here.
42. HANSON ON CAMERA HANSON: Well, fixed costs on a retail side or
broker/distributor side, um, mainly is going to be how,
B-ROLL you’re housing for the wine essentially. What does
your store cost to run? Rent, electricity, gas, uh,
especially for us we have a 4,000-square foot climate-
controlled cellar, which is constantly at 58 degrees and
78 percent humidity. That’s a fixed cost every month
that nobody else in any other business is going to have.
RETURN TO HANSON ON As a broker/distributor, I’m going to have the fixed
CAMERA
cost of a warehouse and of a delivery system
essentially and the freight cost to get the wine from my
warehouse to you.
43. B-ROLL NARRATOR: As opposed to fixed cost, “variable
cost” changes with the quantity of output or amount of
CG: Variable Cost
product sold. This typically includes items such as
direct labor and raw materials required for production,
as well as maintenance services.
44. B-ROLL BOMBOLA: Our generator broke down. That ended
up costing about $13,000 ‘cause we had to buy a new
engine and then have the engine put in and repaired and
BOMBOLA ON CAMERA replaced. We had a tractor that the rear end went out.
That was a $3,000, $3,000 problem. Um, the air
conditioning system we had a problem with a while
ago, which was about 7500 bucks. The bottling line,
B-ROLL
we had a part fall off that fell inside one of the rotating
arms that’s probably gonna be a $25,000 expenditure.
Page 12
RETURN TO BOMBOLA ON So those types of things you have to figure in because
CAMERA
if you end up with a, let’s say your, your operation and
maintenance you expect to be 40 to $50,000 a year,
$60,000 a year and you budget 10 percent, and it goes
to 100 percent, well that’s a cost that you have to, you
have to, um, recoup. And you just can’t wholesalely
raise your prices by whatever to offset that. The
B-ROLL
machinery and equipment that you have no control over
are probably the biggest variables in terms of cost that
we have to account for.
45. B-ROLL NARRATOR: Another tool that managers use in
making pricing decisions is “break-even analysis,”
CG: Break-Even Analysis
which examines the relationship between total revenue
and total cost at different levels of output. This often
CG: Break-Even Point includes determining a company’s “break-even point,”
the amount of goods or services that needs to be sold in
order for the company to break even, that is, the point
where total revenue equals total cost.
46. B-ROLL BOMBOLA: So from really August to the next
August, what we’re doing is saying, what is it really
gonna take to run the business? How much do we
really have to sell at a minimum? And where’s that
number going to be? Can we achieve it out of the retail
BOMBOLA ON CAMERA tasting room? So we have literally had to go in through
every aspect of our business from our mortgage to our
operation and maintenance to the labor to all our
suppliers to every purveyor that we’ve had out there
and go back and do an analysis of, of what it’s costs us
to do that portion of the business. So we’ve taken the,
B-ROLL
the costs and reduced them while the production and
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sales have gone up our costs have really stayed the
same. And, in fact, in some areas gone down.
47. GRAPHIC: NARRATOR: The last step in pricing goods and
Setting Prices
services is setting a final price. When setting a final
Constraints price, companies need to find a starting point -- an
• Estimate Demand & approximate price level. Managers can use several
Revenue
• Determine Cost, Volume, & approaches to do this. Demand-oriented approaches
Profit focus on the factors affecting consumer demand. For
• Set Final Price
example, using a “penetration pricing” approach, a
GRAPHIC: company sets a relatively low price hoping to capture
Demand-Oriented Approaches
market share. In contrast, a company using “prestige
• Penetration Pricing
• Prestige Pricing pricing” will set a relatively high price to attract the
quality or status conscious buyer.
48. B-ROLL HANSON: Some people will look for low price, the
value, and they will realize because of what they’ve
read in trade publications or speaking with retailers or
HANSON ON CAMERA
friends of theirs that you can get a great wine at a low
price. Wine is one of those items that you really can’t
say that price dictates quality. So they’ve heard or
they’ve read about a particular wine from let’s say Italy
B-ROLL
that costs them maybe $5.00 essentially. And they’ve
tasted it, they know it’s great and they’re going into the
RETURN TO HANSON ON store to buy that lower priced wine. However, you
CAMERA
have another person who is convinced that nothing
under $50 is good enough for them. They are the other
customer that believes that price does weigh very
heavily on quality in a wine.
49. GRAPHIC: NARRATOR: When using a “cost-oriented” approach,
Cost-Oriented Approaches a company focuses on the cost rather than demand in
• Cost-Plus Pricing
pricing. For example, a common method used to set
• Standard Markup Pricing
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prices for business products is cost-plus pricing. This
involves taking the total unit cost of providing a
product and adding a specific amount. Another
approach companies use is “standard markup pricing”
which adds a built-in percentage to the cost of
everything in a product class.
50. B-ROLL BOMBOLA: In the larger wine producers, if they’re
going to produce a table variety and it’s gonna be
BOMBOLA ON CAMERA
80,000 case production, they have built into their
system that they need to get a certain return to make
that economically work. And whether that’s $20 a case
or $40 a case they have those internal costs down to the
point where they have to get that product to market at a
certain price.
51. HANSON ON CAMERA HANSON: Especially in California, we are really a
discount state when it comes to wine. We really cannot
make that high of a mark-up. I will say that full mark-
up for wine is actually thirty-three and a third percent,
which surprises a lot of people ‘cause they look at us as
though, once again, we’re a luxury item that we’re like
jewelry or clothing or cars for that matter. There really
isn’t that great of a mark-up on wine and the majority
of wine is actually marked up much less than thirty-
three percent.
52. GRAPHIC: NARRATOR: Some companies use “competition-
Competition-Oriented Approaches oriented” pricing approaches that use competitive
• Above-, At-, or Below-
products as benchmarks. For example, an evaluation of
Market Pricing
competitors’ prices will help a company decide
whether to price “above-, at-, or below-” the market.
53. B-ROLL BOMBOLA: With the hundreds and hundreds of
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different varieties that are available, and the prices that
BOMBOLA ON CAMERA go along with those particular wines, so we, we use
those, those ultimate retailers as a guideline. We’ll go
to the four or five largest retailers out there, look at a
Chardonnay for example and see what the variety is in
price for that particular product. And then compare our
product to that and give us a, a, a guideline so to speak
or a range if you will of where we think our product
should be priced and, and then just go from there.
54. B-ROLL HANSON: We have our fixed and variable costs that
we have to take into consideration. So we have to
decide, do we want to be lower than them, do we want
HANSON ON CAMERA to match them? Or do we mind being a buck or two

higher than they are essentially? So that will help us
determine our pricing.
55. GRAPHIC: NARRATOR: Another competition-oriented approach
Competition-Oriented Approaches is “loss-leader pricing” which is used by many retailers.
• Above-, At-, or Below-
The product is sold below its normal price in order to
Market Pricing
• Loss-Leader Pricing bring customers to the store in hopes they will also buy
other items with a higher mark up.
B-ROLL
56. B-ROLL HANSON: Now let’s say you want to attract more
people to a particular wine. And we will do what is
HANSON ON CAMERA
called the loss-leader. We’re just gonna get you in the
store to buy that particular wine and buy volume of that
wine essentially. And that’s the great deal for you.
You know, we’re, we’re making a little bit of money
but basically we’re breaking even on it most of the time
‘cause it’s just barely covering our costs of bringing it
in and maintaining it.
57. B-ROLL NARRATOR: After establishing an approximate price
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level, a company has to set a list price for its products -
- that is the quoted selling price before any special
adjustments or reductions are made to it. In doing this,
CG: One-Price Policy the seller must decide between a “one-price policy” –
meaning one price for all buyers with no variations --
CG: Flexible-Price Policy or a “flexible-price policy,” which means that prices
will be reduced or increased depending on changes in
demand, cost and the competition.
58. B-ROLL NARRATOR: Companies sometimes deduct a variety
of discounts and allowances from the list price to
CG: Discounts & Allowances
reward buyers and also to gain services from them such
as – preferred shelf space, promotion and quicker
payments. They are reductions in return for a favorable
activity from the buyer to the seller.
59. HANSON ON CAMERA HANSON: Sometimes it will be absorbed by the
distributor or broker and sometimes it will be absorbed
by the winery and sometimes it will be absorbed by all
B-ROLL three. It really depends. Many times there’s a volume

discount on buying wine from a broker or distributor or
winery. So let’s say case one, you know, costs you
$245. But if you buy three cases they’ll go ahead and
RETURN TO HANSON ON
CAMERA take 10 percent off. Buy 10 cases they’ll take 15
percent off.
60. HIRST ON CAMERA HIRST: Sometimes we’ll offer a discount if our
distributor is running a special on something. And, um,
then we’ll pass it along to the consumer. And then
maybe we’ll even go a little bit lower so we can have it
like an advertised special and, and just go like six
percent over cost. Um, and then the price looks really
good.
Page 17
61. B-ROLL NARRATOR: For most companies, setting prices is
both an art and a science.
62. B-ROLL BOMBOLA: The ultimate retail price has so many
different variables in it, um, from what the competition
is, for the awards that have been won, the overall
BOMBOLA ON CAMERA
market, the consuming public, the year, the weather,
B-ROLL the variety, the quality of the product, the competition,
the glut on the market, business related costs that are
associated with producing the juice. And the only real
RETURN TO BOMBOLA ON true test is by what you’re able to ultimately sell. If it’s
CAMERA priced too high or priced too low, are factors that can,
can really have an impact. So we take all those
different variables, hard costs, and then just the market
conditions and try to set a price that we think is fair and
reasonable.
63. B-ROLL NARRATOR: By having a thorough understanding of
its goals and business objectives, its target market, and
the different considerations and approaches in setting
prices, Stuart Cellars has found the right formula for
success and profit.
64. ROLL CREDITS (MUSIC)
Page 18

Stewart Cellars

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CONCEPTS IN MARKETING

3. Program title sequence: (Series Theme)

NARRATOR: Companies are in business to make a

NARRATOR: Stuart Cellars is a family owned

NARRATOR: Managers consider several factors

15. GRAPHIC: NARRATOR: Pricing goods and services, like many

16. B-ROLL NARRATOR: To set prices, a company must first

HANSON ON CAMERA If you have to go buy grapes from somebody else

29. B-ROLL NARRATOR: To estimate demand, managers first

B-ROLL That has gone away. There’s been a glut on the

40. B-ROLL NARRATOR: A company needs to thoroughly

HANSON ON CAMERA to match them? Or do we mind being a buck or two

B-ROLL three. It really depends. Many times there’s a volume

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