Factors Affecting Pricing Decisions by HC121107061418

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									                           Factors Affecting Pricing Decisions
                    Project #3 :: She Sells Cell Phones at the Cell Store

Selling Price
 The amount a seller charges for a good or service; usually thought of as the dollar figure
  shown on the price tag of products or quoted as the price of services

Examples of Selling Prices
 Dues for an organization’s membership
 Automobile insurance premium
 Toll for driving on certain roads
 College tuition
 Bus or taxi fare
 Fee for legal advice or medical attention
 Salaries of professional athletes

Characteristics
 The can’t be pulled out of thin air
    Each business must carefully determine and adjust selling prices
 They change
    Gasoline prices fluctuate with the price of crude oil

Money, Money, Money
 Businesses have to pay all the costs associated with the products they sell
 They have to pay their operating expenses
    Utilities
    Salaries
    Lease/rent of building
    Supplies

Importance of Selling Price
 Businesses and customers use selling price as a way to compare products when making
  buying decisions
 Businesses and customers use selling price as a way to decide how to allocate their
  money
    Since they can’t buy everything they want, they look at selling price to decide which
     items they can afford
 Businesses use selling price to determine the amount of income from sales they’ll receive
    Businesses determine how much markup they’ll apply to the cost of products to pay
     current expenses and to provide for the business’s future growth

Pricing / Marketing Objectives
 Businesses need to set their marketing objectives first, and then determine the pricing
  objectives that will most likely help them achieve the marketing objectives
 As marketing objectives change, pricing objectives will need to be reviewed and possibly
  changed

Pricing Objectives
 Sales-oriented objectives
    Focused on increasing total income from sales and can be accomplished in two ways:
        Charge low prices to increase the volume of sales so that the business has more
         total income because it sells more products
        Charge high prices to increase the dollar value of each sale
 Profit-oriented objectives
    Focused on creating profit for a business
        Some businesses set prices that result in the greatest amount of profit
        Other businesses set prices to recover their costs and earn a reasonable profit

Benefits
 Marketing benefits our society
    Makes our lives better
    Promotes using the earth’s resources more wisely
    Encourages trade between nations

What, No Marketing?
 Without marketing, our nation would have difficulty linking producers with customers
 Without marketing, our own routines would be different because marketing shapes even
  the little things we do

								
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