View
140
Download
9
Category
Preview:
Citation preview
PRICING HOW DO WE DETERMINE THE SALE PRICE OF PRODUCT OR SERVICE
(SIMPLE & PRACTICAL APPROACH FOR SMALL & MEDIUM BUSINESS)
By
Cheruku Srikanth
IDOS CORP
Sale price
¤ Price at which we sell our products or services
¤ Three types: ¤ Loss
¤ Break-even
¤ Profit
¤ Subject to local taxes
1– DETERMINE COST / determinar el costo
AVERAGE COST / COSTO PROMEDIO
SAMPLE
ITEM OF COST MONTH 1 MONTH 2 MONTH 3
Rent / GASTOS DE ALQUILER 450.000 450.000 450.000
Salario 750.000 750.000 750.000
Stationery / artículos de oficina 50.000 30.000 60.000
Marketing / DESARROLLO EMPRESARIAL
150.000 250.000 100.000
Travel / VIAJES 100.000 70.000 120.000
Others 75.000 50.000 90.000
TOTAL 1.525.000 1.505.000 1.470.000
1.525.000+1.505.000+1.470.000 -------------------------------------------
3 =1.500.000
COSTO PROMEDIO =
LOSS / BREAK EVEN / PROFIT
COSTO = 15.00.000
LOSS STRATEGY
Discount sales are charged as marketing expenses. Induces customers to buy other items where shop has a margin.
BREAK EVEN STRATEGY
PROFIT
PROFIT
PROFIT
COST ALLOCATION
ITEM OF COST PRODUCT 1 PRODUCT 2 PRODUCT 3
Rent / GASTOS DE ALQUILER 20% 30% 50%
Salario 10% 10% 80%
Stationery / artículos de oficina 5% 15% 80%
Marketing / DESARROLLO EMPRESARIAL
10% 5% 85%
Travel / VIAJES 5% 5% 90%
Purchase price
Others 0 0 100%
TYPES OF PRICES
CASE STUDY 1
CASE STUDY 2
CONTRACT PRICING
CASE STUDY 3
CASE STUDY 3 (cont’d)
• Salary • Fringe • Overhead • G&A • Fee (contract type/risk, market condition)
CASE STUDY 3 (cont’d)
• Assignment of risk is the biggest difference between the three types of contracts
• Risk analysis is key to the selection of an appropriate contract type to control costs, enhance competition and performance
• Negotiation of contract price is closely related to the contract type
THANK YOU
Recommended