WHAT’S IN A PRICE? Why did Apple select $579 as the retail selling price of the Apple iPad Air Retina tablet? IMPLEMENTING AUTOMATED RETAIL: PRICE

PRICE The cost of a good or service o an exchange (typically a monetary exchange) in order to obtain something The price of goods and services is established to fulfill a successful exchange process with the customer. o Customer perspective: price is what must be given up in order to get something that they want o Seller perspective: price is revenue that is gained for a product that leads to profit for the seller IMPLEMENTING AUTOMATED RETAIL: PRICE

PRICING DECISIONS Making good pricing decisions is critical to the success of the business. o If a product is priced too high or too low, it can create a loss for the business. The term price is used interchangeably with the term cost—however, the two are very different. o Price is what a customer pays a seller—usually a retailer. o Cost is what the seller incurs (which may include cost of production) to obtain the product. IMPLEMENTING AUTOMATED RETAIL: PRICE

PRICING DECISIONS Internal Factors: are within the control of the business or can be altered by the business. o cost of goods, operating expenses, product mix External Factors: occur outside of the business operation and cannot be controlled by the business. o supply and demand, government regulations, competition, natural and economic events IMPLEMENTING AUTOMATED RETAIL: PRICE

PRICE TO MAKE A PROFIT Retailers and School Based Enterprises need to have a clear understanding of all of their costs involved. o The business must understand additional costs to the retailer to sell the product through the automated retailing system. Automated retailing kiosks have additional costs of doing business. o leasing fee o credit card processing fee o specialized packaging and labels IMPLEMENTING AUTOMATED RETAIL: PRICE

FEES AFFECT PRICING Leasing fees Credit card processing fees Specialized packaging and labels IMPLEMENTING AUTOMATED RETAIL: PRICE

ACTIVITY Pricing Products for the Automated Retailing Kiosk and SBE IMPLEMENTING AUTOMATED RETAIL: PRICE

PRODUCTInternal FactorsExternal FactorsPricing Decision based on Internal and External Factors: NIKE polo; custom embroidered with school mascot Cost of item: $25 each Packaging for Spirit Box: $.20 Credit card processing fee for Spirit Box: 2% of all credit card purchases Company goals/profit objectives Boosters online selling price for similar NIKE polo: $45 Price of other school stores in our district-:$40 Target market brand awareness Total cost of goods- including packaging and credit card processing fee: $25.22 Company Objective: 50% markup on apparel Retail price: $39

ACTIVITY Pricing Spirit Factory Products for Automated Retailing IMPLEMENTING AUTOMATED RETAIL: PRICE

QUIZ Pricing Products and Considerations for Automated Retailing IMPLEMENTING AUTOMATED RETAIL: PRICE