PRICE

The amount of money expected, required, or given in payment for something.



The Barter System

where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.

Product Value

assessed by a business when setting a price for a particular product can depend on its production costs, its overall market value and the value of the product as perceived by a targeted group of consumers.

Importance Of Price

 Price is important to marketers because it represents marketers' assessment of the value customers see in the product or service and are willing to pay for a product or service.

6 Steps For Determining Prices

1st Step

Determine Pricing Objectives

What Is Your Purpose?

2nd Step

ESTIMATE DEMAND AND REVENUE

Set prices at the level customers expect to pay.

3rd step

Determine Cost, Value, & Profit Relationships

used to determine how changes in costs and volume affect a company's operating income and net income.

4th Step

Select An Approximate Price Level

How much money are you asking for ?



5th Step

Set List or Quoted Prices

Quoted price refers to stock, bond or other security quotes. A stock quote is an estimate of price or a price at which one party is willing to buy or sell a certain number of shares of stock from the other.

6th Step

Make Adjustments To List Price

Putting How Much Money You Want When Purchasing something

Return On Investments (ROI)

 the ratio between the net profit and cost of investment resulting from an investment of some resource.

ROI

What is Return On Investments ( ROI )?

 ROI measures the amount of return on an investment relative to the investment’s cost.

How much should you charge the retailor?

Revenue is usually split 60 percent to the store and 40 percent to you, although everything is negotiable. If your product is a "hot" item or helps drive extra traffic to that retailer, you can start at 60/40 then maybe move to a 50/50 or even 40/60 split.

Break-Even Point

in economics, business—and specifically cost accounting—is the point at which total cost and total revenue are equal. There is no net loss or gain, and one has "broken even," though opportunity costs have been paid and capital has received the risk-adjusted, expected return.

Demand Elasticity

Inelastic Demand

Inelastic demand in economics is when people buy about the same amount whether the price drops or rises.

Elastic Demand

 Elastic demand is when price or other factors have a big effect on the quantity consumers want to buy.

Law Of Diminishing Marginal Utility

The law of diminishing marginal utility is a law of economics stating that as a person increases consumption of a product while keeping consumption of other products constant, there is a decline in the marginal utility that person derives from consuming each additional unit of that product.

Price Fixing

the maintaining of prices at a certain level by agreement between competing sellers.

Price Discrimination

the action of selling the same product at different prices to different buyers, in order to maximize sales and profits.

Clayton Anti-Trust ACT 1914

The Clayton Antitrust Act of 1914, was a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act sought to prevent anticompetitive practices in their incipiency

Robinson-patman act of 1936

 a United States federal law that prohibits anticompetitive practices by producers, specifically price discrimination.



1975 consumer goods pricing act

make it illegal for manufacturers to fix the prices of consumer products sold by retailers.

Government Regulations

Minimum Price Laws

Minimum prices are price floors and are most commonly associated with minimumwages in the labour market or guaranteed price support schemes for farmers or other producers. Our basic analysis in this section focuses on this.

Predatory Pricing

the pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.

Unit Pricing

identification of and labeling of items for sale with the retail price per unit, permitting easier price comparisons among similar products in different sized containers.

Price Advertising

The price of a product or service as displayed or announced in an advertisement or radio/TV commercial.



Bait and switch

the action (generally illegal) of advertising goods that are an apparent bargain, with the intention of substituting inferior or more expensive goods.

Competition

Competition is the rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market share growth.

Oriented Pricing

a common form of cost-oriented pricing used by retailers involves simply adding a constant percentage markup to the amount that the retailer paid for each product.

Skimming Pricing

Price skimming is a product pricing strategy by which a firm charges the highest initial price that customers will pay.

Penetration Pricing

Penetration pricing refers to a marketing strategy used by businesses to attract customers to a new product or service.