chapter 9 pricing. pricing product cost-plus pricing markup manufacturing business product costing...
TRANSCRIPT
Chapter 9
Pricing
pricingproduct cost-plus pricingmarkupmanufacturing businessproduct costingcost behaviorvariable costsdirect materials
direct laborfixed costscontribution marginbreak-even pointmarket penetrationtarget profittarget salesmargin of safety
Chapter
9
Pricing, Costing, and Growth
Chapter
9
Pricing, Costing, and Growth
PricingSection 1
Chapter
9
Pricing, Costing, and Growth
Goals of Pricing
To obtain a given share of
the market
To generate sales that produce a
specific profit
To meet competitors’
prices
Selling PriceSection 1 Merchandise Pricing and Costing
Chapter
9
Pricing, Costing, and Growth
Value Basis Prices Are
Determined by How the Customer Values:
Quality
Service
Availability
Product Benefits
Making a profit is always at the top of a business’s goals. Explain why an increase in prices may not lead to an increase in profits.
Profits will not increase if the costs and expenses also increase (or increase at a higher rate), or if sales volume goes down because of the higher prices.
Section 1 Merchandise Pricing and Costing
Chapter
9
Pricing, Costing, and Growth
Sources of Business GrowthChapter
9
Pricing, Costing, and Growth
Sources of Business GrowthChapter
9
Pricing, Costing, and Growth
Individuals
Organizations
Advantages of Franchising
Expanding with someone else’s money
Easily managing a growing organization
You do not have to oversee the workforce
Disadvantages of Franchising
It’s like starting your business all over again
Preparation of training manuals
Legal, accounting, and consulting costs
A possible wait of three to five years before profit
The Challenges of GrowthChapter
9
Pricing, Costing, and Growth
Factors That Affect the Ability of a Business to
Grow
MarketCharacteristics
MultipleSites
DelegationIndustry
Innovation
Systems andControls
Planning and GrowthSection 2
Chapter
9
Pricing, Costing, and Growth
Individuals
Organizations
Planning for a Successful Future
Make sound financial decisions for short- and long-term goals.
Set realistic financial targets.
Control expenses and costs.
Analyze financial statements frequently.
Analyze your competition.
Evaluate current economic conditions.
Maintain a reserve fund.
Supply and Demand
PRIC
E
QUANTITY
SUPPLYDEMAND
When supply is greater than demand, business owners may lower the price in hopes of increasing demand.
Chapter
9
Pricing, Costing, and Growth