BUS 201 Chapter Notes - Chapter 13: Psychological Pricing, Price Skimming, Sales Promotion
15 Aug 2016
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Lo 1 identify the various pricing objectives that govern pricing decision, and describe the price-setting tools used in making these decisions. Pricing = process of determining what a company will receive in exchange for its products. Pricing objectives = goals that sellers hope to achieve in pricing products for sale. Pricing decisions influenced by need to compete in marketplace, social/ethical. Market share/penetration = company"s % of total industry sales for a specific product type. Cost-oriented pricing = considers firm"s desire to make a profit and its need to cover production costs. Markup = amount added to an item"s purchase cost to sell it at a profit. Variable cost = changes w/ quantity of product produced & sold. Fixed cost = incurred regardless of quantity of a product produced and sold. Breakeven analyses = for a particular selling price, assessment of seller"s costs vs revenues at various sales volumes.
