Chapter 27 pricing math Section 27.1 Calculating Prices Section 27.2 Calculating Discounts

CONNECT Why is setting a price an important part of the marketing mix? Calculating Prices Section 27.1 CONNECT Why is setting a price an important part of the marketing mix?

Calculating Prices Section 27.1 Explain how a company’s profit is related to markup. Use the basic formula for calculating a retail price. Calculate dollar and percentage markup based on cost or retail. Calculate markdowns in dollars and percentages. Calculate maintained markup in dollars and percentages.

Calculating Prices Section 27.1 Pricing and profit have a direct relationship to each other. Retailers use different pricing formulas for calculating prices, markups, and markdowns.

Calculating Prices Section 27.1 gross profit maintained markup

Calculating Prices Section 27.1 Identify the Formula for Calculating a Retail Price in the Middle Circle. Use Outer Circles to Note Other Formulas

The markup (margin) on an item is the same as gross profit. Calculating Prices Section 27.1 Profit and Markup The markup (margin) on an item is the same as gross profit. gross profit The difference between sales revenue and the cost of goods sold.

Calculating Prices Section 27.1 Profit and Markup Goals of Pricing

Calculating Prices Section 27.1 Profit and Markup Goals of Pricing

Three Basic Ways to Perform Markup Calculating Prices Section 27.1 Profit and Markup Three Basic Ways to Perform Markup

Three Basic Ways to Perform Markup Calculating Prices Section 27.1 Profit and Markup Three Basic Ways to Perform Markup

Calculate Percentage Markup on Retail Calculating Prices Section 27.1 Profit and Markup Calculate Percentage Markup on Retail

Calculate Percentage Markup on Retail Calculating Prices Section 27.1 Profit and Markup Calculate Percentage Markup on Retail

Calculate Percentage Markup on Cost Calculating Prices Section 27.1 Profit and Markup Calculate Percentage Markup on Cost

Calculate Percentage Markup on Cost Calculating Prices Section 27.1 Profit and Markup Calculate Percentage Markup on Cost

The Cost Method of Pricing Calculating Prices Section 27.1 Profit and Markup The Cost Method of Pricing

The Cost Method of Pricing Calculating Prices Section 27.1 Profit and Markup The Cost Method of Pricing

Calculating Prices Profit and Markup Section 27.1 Profit and Markup Convert the Markup on Retail to the Markup on Cost and Apply it to the Cost of an Item

Calculating Prices Section 27.1 Section 27.1 1. Discuss why retailers prefer to use markup percent based on the retail price instead of the markup percent on cost. Retailers prefer markup percent based on retail price because the markup on retail price sounds like a smaller amount and makes the price seem more reasonable to the consumer. Future markdowns and discounts are calculated on a retail basis. Profits are generally calculated on sales revenue.

Calculating Prices Section 27.1 Section 27.1 2. Identify when the markup equivalents chart is used to calculate retail prices. The markup equivalents chart is used to calculate retail prices when you know the cost and you know the percent of markup you want based on retail price.

Calculating Discounts Section 27.2 CONNECT What was the last discounted item you purchased?

Calculating Discounts Section 27.2 Utilize a general procedure for figuring discounts and net prices. Calculate discounts in dollars and percentages. Calculate net amount.

Calculating Discounts Section 27.2 Discounts affect the final price a customer will pay. It is essential to learn how to calculate discounts and the net price payable.

Calculations for Lowering Prices Calculating Prices Section 27.1 Calculations for Lowering Prices Lowering Prices

Calculating Discounts Section 27.2 Procedures for Calculating Discounts, the Net Amount Payable, and Examples of Discounts Offered by Employers and Vendors

Calculating Discounts Section 27.2 Procedures for Calculating Discounts, the Net Amount Payable, and Examples of Discounts Offered by Employers and Vendors

Calculating Discounts Section 27.2 Discounts How to Calculate a Discount in Dollars Along with an Item’s Net Price

Calculating Discounts Section 27.2 Discounts How to Calculate a Discount in Dollars Along with an Item’s Net Price

Calculating Discounts Section 27.2 Discounts Employee discounts can range from 10 percent to 30 percent for entry-level employees. employee discount A discount offered to workers by their employers.

Calculating Discounts Section 27.2 Discounts Types of Discounts

Calculating Discounts Section 27.2 Discounts Types of Discounts

Calculating Discounts Section 27.2 Discounts How to Calculate a Trade Discount Based on a Series

Calculating Discounts Section 27.2 Discounts How to Calculate a Trade Discount Based on a Series

Calculating Discounts Section 27.2 Discounts Quantity Discounts No. of items 1–24 25–48 49–72 Unit Price $0.95 $0.90 $0.85

Calculating Discounts Section 27.2 Discounts Promotional Discounts $250 ÷ $10,000 = .025 .025 = 2.5%

Calculating Discounts Section 27.2 Discounts Potential Pitfalls of Discount Pricing Frequent sales can numb customer response. Some businesses have to offer very deep discounts to see an increase in traffic. Price promotions may set a precedent. Poorly planned discounts can lead to price wars.

Calculating Discounts Section 27.2 Section 27.2 1. Explain why employers offer employee discounts. Offering discounts encourages employees to buy and use the products in the hope that they will then project confidence in the products and enthusiasm when selling those products.

Calculating Discounts Section 27.2 Section 27.2 2. Identify what the number “3” represents in invoice terms 3/10, net 45. The number “3” indicates that the buyer will receive a 3 percent discount if the invoice is paid within 10 days.

Calculating Discounts Section 27.2 Section 27.2 3. Discuss why vendors offer seasonal discounts. Vendors offer seasonal discounts to encourage buyers to purchase goods long before the consumer buying season.

Chapter 27 pricing math Section 27.1 Calculating Prices Section 27.2 End of Chapter 27 pricing math Section 27.1 Calculating Prices Section 27.2 Calculating Discounts