| Course | BUS 320 Principles of Marketing |
|---|---|
| Module | Module 5 |
| Paper type | Pricing analysis |
| Length | About 1,013 words, 6 pages |
| Format | APA 7 student paper |
| School | Aspen University |
| Program | Business Administration |
| Updated | September 2026 |
Free sample paper for BUS 320 Module 5
Seventeen Dollars No Longer Works: A Pricing Decision at Juniper Row
Student Name
Business Administration Program, Aspen University
BUS 320: Principles of Marketing
Instructor Name
Month Day, Year
Seventeen Dollars No Longer Works: A Pricing Decision at Juniper Row
Juniper Row Coffee Roasters sells a 12-ounce bag of coffee for $17 in its café and online. Over the past year, the composite roaster's cost for green coffee rose by about $1.30 per bag, and shipping and packaging rose slightly. The founder has resisted raising prices, fearing customers will leave. This paper analyzes three approaches to pricing, calculates what the cost increase has done to margins, compares three options and recommends a price.
Three Approaches to Pricing
Cost-based pricing adds a markup to cost; it is simple but ignores what customers will pay. Competition-based pricing sets prices relative to rivals; it keeps a company in line with the market but ignores its own costs and value. Value-based pricing starts from what the product is worth to customers and sets prices to capture a fair share of that value. Nagle and Müller (2018) argue that profitable pricing is strategic and value-based, grounded in understanding how customers perceive value and communicated in a way that helps them see it, rather than a reaction to costs or competitors alone. Juniper Row needs to consider all three, but value should lead.
Why Price Matters So Much
Small changes in price have large effects on profit because a price increase, unlike a volume increase, adds almost directly to the bottom line. In a widely cited analysis of about 2,400 companies, Marn and Rosiello (1992) found that a 1% improvement in price, holding volume steady, would raise operating profit by an average of 11.1%, far more than equal improvements in volume or variable cost. For a small roaster with thin margins, avoiding a needed price increase can quietly erase profit.
What the Cost Increase Did
Before the increase, a bag sold for $17 cost about $7.60 in variable costs, including green coffee, roasting energy, packaging and payment fees, leaving a contribution margin of $9.40, or 55% of price. After the increase, variable cost is about $8.90 and contribution is $8.10, a drop of 14% per bag. On about 38,000 bags a year across all channels at retail price equivalents, that is roughly $49,000 in lost contribution, most of Juniper Row's annual profit.
Three Options
The table compares three options. The last column shows how much sales volume could fall before the option would leave Juniper Row worse off than keeping the price at $17 under current costs.
| Option | Price | Contribution per bag | Volume that could be lost before worse off |
|---|---|---|---|
| Hold price | $17.00 | $8.10 | None |
| Modest increase | $18.00 | $9.10 | 11% |
| Larger increase | $18.50 | $9.60 | 16% |
| Smaller bag at same price | $17.00 for 10 oz | About $9.55 | 15%, if customers accept the change |
What Customers Will Accept
Survey data suggest subscribers are not highly price-sensitive: only 19% named lower price as a reason they would stay, compared with 58% who named delivery control. Competing local roasters charge $17 to $20 for 12 ounces, and national specialty subscriptions charge more. Value-based reasoning suggests that Juniper Row's freshness, brewing help and local sourcing support a price at the middle of the local range. The smaller bag option is less transparent and could damage trust if customers feel misled, which matters for a brand built on honesty about sourcing.
Subscription Pricing and Perception
How prices are presented affects how customers use and value what they buy. Gourville and Soman (2002) found that the way a price is paid shapes consumption: people who pay in a lump sum in advance tend to use a purchase less as the payment fades from memory, while those who feel each payment are more likely to consume and return. For Juniper Row, a monthly subscription charge that coincides with each delivery keeps customers aware of what they are paying for and linked to their coffee, which supports retention. Offering a small discount for subscribers compared with single bags rewards commitment.
Recommendation
Juniper Row should raise its single-bag price to $18.50 and set the subscription price at $17.50 per bag, a $1 discount that rewards commitment. At $18.50, the company would be better off than holding the price unless single-bag volume falls more than about 16%, which is unlikely given the survey results and competitors' prices. The espresso roast and rotating rare lot can be priced at $20, reflecting their higher cost and value to enthusiasts. Wholesale prices should rise by a similar percentage with 60 days' notice.
Communicating the Change
The increase should be explained honestly: green coffee costs have risen sharply, and Juniper Row has chosen to raise prices rather than buy cheaper beans. Subscribers should be told a month ahead, with the new flexible delivery options announced at the same time so the change comes with added value. Café staff should be able to explain the reasons in a sentence.
Wholesale Pricing
Wholesale accounts pay about $12.50 a bag, leaving contribution of only $3.60 at current costs. Wholesale is valuable for steady volume and visibility, but at this margin a cost increase hurts it most. Raising wholesale prices by about 8%, to $13.50, restores contribution to $4.60. Juniper Row should explain the increase in person to each restaurant owner, offer a free barista training session with the new price, and keep the relationship focused on quality and service rather than price alone.
Monitoring the Change
After the increase, the company will watch weekly single-bag sales, new subscriptions, cancellations that mention price and wholesale orders. If single-bag volume falls by more than 10% for two months, the owners will review whether the price or something else, such as season, explains the drop. Price decisions are not permanent, and reviewing them against evidence keeps them honest.
Conclusion
Holding the price at $17 after a $1.30 cost increase would cut Juniper Row's contribution by 14% per bag and erase most of its profit. A value-based increase to $18.50 for single bags and $17.50 for subscriptions keeps prices in the local range, restores margin and would remain profitable even with a substantial loss of volume. Explained honestly and paired with better service, the change protects both profit and trust.
References
Gourville, J., & Soman, D. (2002). Pricing and the psychology of consumption. Harvard Business Review, 80(9), 90-96.
Marn, M. V., & Rosiello, R. L. (1992). Managing price, gaining profit. Harvard Business Review, 70(5), 84-94.
Nagle, T. T., & Müller, G. (2018). The strategy and tactics of pricing: A guide to growing more profitably (6th ed.). Routledge.
BUS 320 Module 5 instructions, in plain terms
Pricing decisions appear in Aspen's description of BUS 320, and a pricing assignment is where marketing meets arithmetic. Aspen releases the Module 5 wording to enrolled students; this sample works one rising-cost problem through to a number. Explain the main pricing approaches and which should lead. Show why price has strong effects on profit. Calculate contribution margin before and after a cost change. Compare several options with the same measures, including how much volume each can lose. Use evidence on what customers value and what competitors charge. Consider how the price is presented, such as subscriptions. Recommend specific prices, including for business customers, and explain how to communicate and monitor the change.
How the BUS 320 Module 5 example is put together
The paper opens with a $17 bag and rising costs. It compares three pricing approaches and cites Nagle and Müller on value-based strategy. Marn and Rosiello's study of about 2,400 companies shows how strongly price drives profit. Calculations show variable cost rising to $8.90 and about $49,000 in lost contribution. A table compares holding the price, $18, $18.50 and a smaller bag, with break-even volume losses of up to 16%. Survey results and local prices support value-based pricing, and the smaller bag is rejected as less transparent. Gourville and Soman's research informs subscription pricing. Recommendations, a wholesale increase to $13.50, honest communication and monitoring rules close it.
Where the marks sit in the BUS 320 Module 5 rubric
Pricing papers are graded on correct calculations, sound reasoning, use of customer and competitor evidence and a clear recommendation. This example shows each calculation and compares options on the same basis, so the reader can check the logic. It cites Nagle and Müller's The Strategy and Tactics of Pricing and two Harvard Business Review articles, Marn and Rosiello on managing price and Gourville and Soman on the psychology of consumption, in APA format. Rejecting the smaller bag on trust grounds shows judgment beyond the numbers. Addressing wholesale customers, communication and monitoring makes the recommendation complete. Every figure in the table can be traced to the cost and price assumptions stated earlier.
BUS 320 Module 5 help from the desk
A frequent weakness is choosing a price without showing the math. Calculate contribution before and after, and show how much volume an increase can lose. Another is relying only on costs or only on competitors; consider value to customers too. Use evidence of price sensitivity if you have it. Be careful with options that could look deceptive, such as shrinking packages quietly. Include business customers if the company has them. Explain how you would tell customers about the change. Double-check every figure. If contribution margin is unfamiliar, practice with one product's price and variable cost before tackling several options at once. A small table that lists price, variable cost and contribution for each option makes errors easy to spot, both for you and for your instructor.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Aspen University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
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BUS 320 Module 5 questions, answered
What does BUS 320 Module 5 usually ask for?
Aspen's BUS 320 covers pricing decisions, so a paper analyzing pricing approaches and recommending a price with supporting numbers is typical. Follow your classroom prompt.
What is value-based pricing?
Setting prices based on what the product is worth to customers, rather than only on costs or competitors' prices.
How do I calculate how much volume a price increase can afford to lose?
Divide the old contribution per unit by the new contribution per unit; one minus that ratio is the share of volume that can be lost before total contribution falls.
Where can I find a free BUS 320 Module 5 sample paper?
The whole pricing analysis is above, with contribution calculations, a table of four price options and how much volume each can lose, and a recommended price.
Why does a small price increase have a large effect on profit?
Because most of the added revenue from a price increase flows directly to profit, while added volume brings added costs.