McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved

One of the Most Difficult Decisions in Marketing

Product

Promotion Price

Price must be a reflection of value

Product Price

Value is the ratio of perceived benefits to price; orValue = (Perceived benefits divided by Price).

Benefits = a dollar and some change worth of value

Benefits = a dollar and some change worth of value= good value

Product Price

Product

Product Price

Profit Equation

Profit = Total Revenue - Total Cost

Value = what I perceive to be the worth of the product when I compare it to substitutes.

Profit Equation

Profit = Total Revenue - Total Cost

.20 per glass.30 per glass

You will need to manuallyadvance to the next slide

Profit Equation

Profit = (Unit Price × Quantity Sold) – (Fixed Cost – Variable Cost)

Profit Equation

Total Revenuex

Quantity SoldUnit Price

70 glasses = $35

Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost

Profit Equation

.50 x 70 glasses = $35 Total Revenue

Fixed cost = $5 Variable cost = .20 per sale

.You will need to manuallyadvance to the next slide

Profit Equation

Fixed cost = $5 Variable cost = .20 per sale

Profit Equation

Fixed cost = $5 Variable cost = $14

Profit Equation Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost

Profit = (.50 x 70) – 5 - 14

Profit = 35 – 5 - 14 = 16

Profit = (P × Q) – [FC + (UVC × Q)]Price Quantity Fixed

CostUnit variable

costQuantity

(.50 X 70) [5 + (.20 X 70)] = 16-

General Pricing Approaches

End of Part One.

Go to Part Two.

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved

Documents

Irwin / McGraw-Hill

McGraw-Hill/Irwin ©2005 The McGraw-Hill Companies, All rights reserved McGraw-Hill/Irwin

Relevant Costs for Decision Making - NELY BACHSIN BLOG · PDF fileChapter Thirteen . McGraw-Hill/Irwin ... McGraw-Hill/Irwin Copyright © 2008, ... McGraw-Hill/Irwin Copyright © 2008,

© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Irwin/McGraw Hill The McGraw-Hill Companies, Inc., 2000 · Slides by Matthew Will Chapter 2 Irwin/McGraw Hill ©The McGraw-Hill Companies, Inc., 2000. Irwin/McGraw Hill ... " Tools

© The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin

Local Marketing in Mature Markets Chapter Eight. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,,

1 2-1 McGraw-Hill/Irwin Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc.,

4 1 Irwin/McGraw Hill

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

#14-1 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights

McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights

McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill

Chapter McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill

Chapter 11 · Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 2001 Chapter 11 Reporting and Interpreting Owners’ Equity. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc.,

McGraw-Hill/Irwin © 2009 The McGraw-Hill Companies, All Rights Reserved Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

17-1 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

McGraw-Hill/Irwin Copyright © 2008 The McGraw-Hill Companies

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill

McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill