MKG 300 Chapter Notes - Chapter 17: Psychological Pricing, Average Variable Cost, Marginal Revenue
13 Sep 2016
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Chapter 17- price setting in the business world. A markup is a dollar amount added to the cost of products to get the selling price. Markup (percent) means percentage of selling price that is added to the cost to get the selling price. A markup chain is the sequence of markups firms use at different levels in a channel- determines the price structure in the whole channel. An important idea here is the stockturn rate- the number of times the average inventory is sold in a year. Average-cost pricing is common and can be dangerous. Average- cost pricing means adding a reasonable markup to the average cost of a product. Marketing managers must consider various kinds of costs. Average-cost pricing may lead to losses because there are a variety of costs- and each changes in a different way as output changes. Consists of adding a reasonable markup to the average cost of a product.
