1. Objective 3.03: Demonstrate ways to compute client costs of goods and services.

2. There are many ___________ that affect pricing

3. Economic Factors
Supply: the amount of ______ or services that producers are willing to provide
Demand: the amount of goods or services that buyers are willing to _____________.

4. Competition
How your _________ is pricing their product or service may determine how YOU will price yours.

5. Costs and Expenses
In order to make a ______, your prices must be set to exceed your costs and __________.

6. Pricing Strategies

7. Demand-based Pricing
Set your price ____________ to what customers are willing to pay
Must have a good understanding of the ___________ perception of the product or service.

8. Competition-based Pricing
Determine your competitor’s pricing. Then:
Price below the __________
Price above the competition
Price in line the with competition.

9. One-Price Policy
All customers pay the same price.

10. Psychological Pricing – price is based on the customer’s perception
Prestige pricing: ________than average price to suggest ______________, status, prestige.

11. Psychological Pricing cont.
Odd/Even pricing
Odd prices suggest ___________ – 4.99
Even pricing suggest higher quality – 5.00.

12. Discount Pricing – reductions from the usual price of a product or service
Cash discounts: encourage prompt ___________
Quantity discounts: offered to buyers for placing large _________
Promotional discounts: offered to sellers who are willing to promote a product or service
Seasonal discounts: offered to buyers who are willing to buy in advance of __________ buying season.

13. Markup
Amount ____________ to the cost of an item to cover expenses and ensure profit
Markup can be based on:
A standard _______________ the business needs per item to cover expenses
The markup of competitors
The average __________ for the industry.

14. Formulas for Calculating Cost, Retail, Markup, and Markup Percentage
Markup / Cost = Percentage of Markup
$5.00 / $15.00 = 33%
Retail - Markup = Cost
$ $5.00 = $10.00
Cost + Markup = Retail Price
$ $15.00 = $40.00
Cost x Markup % = $ Markup
$10.00 X 150% = $15.00