RSM100Y1 Chapter Notes - Chapter 17: Direct Market, Pricing Strategies, Price Skimming
Document Summary
Markup is stated as % of selling price markup/sales price (tells you how much gross profit goes to store: break-even analysis: cost-volume-profit relationships. Break-even analysis: an assessment of how many units must be sold at a given price before the company begins to make a profit. Break-even point: the number of units that must be sold at a price before the company covers all of its variable and fixed costs total fixed costs/price-variable cost. Zero profitability at break even point can be seen using the profit equation: profit = total revenue (total fixed costs + total variable costs) Pricing strategy: pricing as a planning activity that affects the marketing mix. Pricing tactics: ways in which managers implement a firms pricing strategies. Pricing existing products: can set price above prevailing market prices for similar products or below the price at the price: price leadership: the dominant firm in the industry establishes product prices and other companies follow suit.
