BUS 200 Study Guide - Final Guide: Reverse Auction, Price Skimming, Dynamic Pricing

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 200
• Professor: Sam Thiara

Document Summary

Pricing: process of determining what a company will receive in exchange for its products. Pricing objectives: the goals that sellers hope to achieve in pricing products for sales: profit-maximizing objectives. Set prices to cover costs (eg materials, labor, capital resources, marketing costs) and achieve a targeted level of return for owners: market-share (market penetration) objectives. Companies may set low prices for new products to establish market share (a (cid:272)o(cid:373)pa(cid:374)(cid:455)"s percentage of the total industry sales for a specific product type: pricing for e-business objectives. Price-setting tools: cost-oriented pricing (cid:272)o(cid:374)siders a fir(cid:373)"s desire to (cid:373)ake profit a(cid:374)d its (cid:374)eed to (cid:272)o(cid:448)er produ(cid:272)tio(cid:374) (cid:272)osts. Markup: the amount added to a(cid:374) ite(cid:373)(cid:859)s pur(cid:272)hase (cid:272)ost to sell it at a profit. Eg if the markup percentage= 46. 7% that means out of every taken in, sh. 467 will be gross profit: breakeven analysis: cost volume-profit relationships. Variable cost: cost that changes with the quantity of a product produced and sold.