What the seller requires in exchange for ownership (or use) of the product or service
sales volume and price
The total sales REVENUE of a small business is a direct reflection of two components
Quantity sold X Price per unit
covers the TOTAL COSTS plus some margin of PROFIT.
Cost of Goods + Selling Cost + Overhead
cost of goods sold
Cost of item
Employee’s time and/or commission for that sale
Advertising / marketing costs
for a product/service influences what the firm can charge
Will be Demand When
The consumers PERCEIVE the product/service as important to satisfy an UNSATISFIED NEED
INCREASE IN PRICE lowers demand
DECREASE IN PRICE raises demand
LITTLE CHANGE in demand regardless of price
break even point
Point at which total sales revenue equals total costs
value-oriented family (Walmart)
Experience-oriented families (nordstrom)
value-oriented family ex:
keep overhead down, more unlicensed staff, functional cars not showy,
nice cars, very educational workers, building has to be big and perfect
More than two-thirds of the funeral homes in the U.S. cannot differentiate themselves into either the value camp or the experience camp.
funeral home pricing
They have high overhead expenses.
They try to blend pricing for both value-oriented & experience-oriented families.
They rely heavily on profit from merchandise.
seller provides goods or services to the buyer in return for the buyer’s promise to pay later.
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