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BUDGET-PRICED GOODS |
products at the lowest end of the price scale |
DEMAND-CURVE |
– the line on a graph which shows the relationship between prices and consumer demand |
GOING RATE |
the price which the market will accept for a product or for a service |
PRICE WAR |
a period during which several competitors aggressively lower their prices in an effort to build up market share |
RETAIL MARGIN |
– the difference in price between what retailers pay for a product and what they sell the product |
SELLING COSTS |
the total amount of money spent on all aspects of selling, including advertising, commissions and promotion |
UNIT COST |
the amount of money necessary to produce one individual example of a product |
BREAK-EVEN POINT |
the point in the development of a product when sales begin to exceed the investment |
DISCOUNTING |
reducing the price of goods in return for bulk sales or to a favoured customer |
FACTORY GATE PRICE |
the price wholesalers and distributors pay to the producer for goods |
INELASTIC DEMAND |
– sales of a product do not change much with variations in price |
OVERHEADS |
– the day-to-day costs of running a business |
PENETRATION STRATEGY |
– a pricing strategy based on low pricing and low unit profits |
PRICE SENSITIVE BUYERS |
consumers who are very attentive to price changes and look for lower-priced items |
LOSS LEADER |
a product sold at an independent of any specific business activities such as rent, salaries, wages, interest.especially low price, perhaps at a loss, in the expectation that customers will spend money on other goods where margins are high |
CARTEL |
an illegal and secret agreement between competitors to fix higher prices to boost their profits |
FIXED COSTS |
- is a cost that does not change with an increase or decrease in the number of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, |
VARIABLE COSTS |
is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company's production volume; they rise as production increases and fall as production decreases. Examples of variable costs include |
AGGRESSIVE PRICING |
a situation in which a company offers goods at such a low price that other companies cannot compete with it. Predatory pricing is an abuse of dominant position, and is illegal in several countries. |
FACTORY GATE PRICE (2) |
the actual cost of manufacturing goods before any mark-up is added to give profit |
PENETRATION |
penetration defines how many users are there for a product. It is one of the measures of a company or industry's success in getting consumers to use their products. |
MARKET SHARE |
market share represents the percentage of an industry, or a market's total sales, that is earned by a particular company over a specified time period |
PREMIUM PRICE |
- is when the price of a product or service is significantly higher than similar competing products because the company either demonstrates or the consumers perceive, that the product or service is of high quality or is particularly unique enough to just |
PRODUCTION COSTS |
refer to the costs incurred by a business from manufacturing a product or providing a service (such as labour, raw materials, consumable manufacturing supplies, and general overhead) |
RECOMMENDED RETAIL PRICE |
is the price at which the manufacturer recommends that the retailer sell the product |
SALE PRICE |
the price that is paid by the buyer at the time when something is sold |
Margin |
difference between the cost price and selling price of a product |
RETAILER |
- a person, shop, or business that sells goods to the public |
CONSUMER |
a person who buys goods or services for their own use |
MARKET PRICES |
unique price at which buyers and sellers agree to trade in an open market at a particular time |
WHOLESALE PRICES (1) |
the cost of a good sold by a wholesaler. The wholesaler will usually charge a price somewhat higher than he or she paid to the producer, and the retailer who purchases the goods from the wholesaler will increase the price again when they sell the good in |
UNIT COST (1) |
the expenses involved in producing each individual product |
SALES TARGET/PROFIT TARGET |
the number of sales/profit business wants to achieve |
LAUNCH |
to introduce product onto the market |
MARKET SHARE |
– the proportion of total sales in the market |
ECONOMIES OF SCALE |
the cost of producing each unit decreases as the volume of production increases |
MARKET SEGMENTS |
groups of consumers with similar needs and wants |
MONOPOLISTS |
companies that are the only supplier of a product or service |
TARGET CUSTOMERS |
the customers whose needs the company wants to satisfy |
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