A large user of package components should be able to receive discounts from businesses that provide them. Evaluate the role packaging can play in the business's marketing program. While packaging can be used to implement many different strategies, the basic intent is to generate additional business. Determine if the package is feasible by applying a break- even analysis to help determine how many packages a business must sell before earning a profit. This analysis technique can also be used to evaluate alternative pricing levels.
Definitions Fixed costs are expenses the business incurs before any sales are made.
These costs often include advertising, flyers, brochures, costs of employee time to organize the package, and prepayment costs for other package components. Package price is the actual sale price of the package. The Lake Hotel plans to offer a weekend sports package during the professional baseball season to include tickets, room, a ride to the stadium, two meals, and executive hotel service. Package Pricing Worksheet Use the worksheet on the following page to estimate the cost of your package. You may need to rework the cost estimates several times to get a mix of package products at a price that is attractive and will generate a profit for your business.