BUS 201 : Chapter 13 – Pricing.docx

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 201
• Professor: Peter Tingling

Document Summary

Chapter 13 pricing, promoting, and distributing products. 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. Compete in marketplace, social/ethical concerns, corporate image. Market-share pricing objectives: a company may set low prices to establish market share. Market share (market penetration): a company"s percentage of the total industry sales for a specific product type. Cost-oriented pricing: pricing that considers the firm"s desire to make a profit and its need to cover production costs. Selling price = seller"s costs + profit. E. g. costs of making a dvd available to shoppers: store rent, employee wages, utilities, product displays, insurance, manufacturer"s price. Markup: amount added to an item"s purchase cost to sell it at a profit: markup percentage = (markup)/(sales price, e. g. / = 46. 7% for every taken in, there will be sh. 467 gross profit.