Chapter 1: Pricing Concept Importance of Price (Seller)

 Revenue

Price - The price charged to

 Value customers multiplied by the
 Worth number of units sold.
 The amount of money that

you pay for something or Profit



that something cost - Revenue minus

Expenses
WHAT IS PRICE? - Profit- net income/income
- PROFIT- dat mataas ang revenue kesa
sa expenses
Seller (Price)
 Price is revenue and ““Managers must select a
profit source price that is not too high or
not too low, a price that
Consumer (Price) equals the perceived value to
 Price is the cost of target consumers”
something
Revenue- as benta sa part ng services ex.
barber shop and
--consumer-cost/gastos SALES- used to merchandising,
--gitna na babayaran in terms of trade or fracturing. However, same lang and
exchange happened SALES and REVENUE
E. g.
PRICE Tom Sawyer….
- Price is that which is given
up in an exchange to
acquire a good or service.

- given-taken
- Price x Number of units/items or
Quantity(QUANTITY lahat).
Sabi nila……. 2. Sales Oriented Pricing
“Lahat ng tao may HALAGA. - Setting prices to increase or
Kadalasan nga lang nakikita mo boost the volume. (Set price to
yung halaga kapag……….. increase volume/quantity. Number of
. items/product na nabebenta (focus)
Market)
.
 Market Share- A
.
company’s product sales as a
.
percentage of total sales for
WALA NA.”
that industry. (percentage of
Pricing Objectives producers of same products(mataas
- main concept of setting prices or ung tubo-mataas ang market share)
choosing pricing strategy It changes based on the number of
customers/consumers or mga
1. Profit Oriented Pricing mabebenta mo. May profit
- Setting prices for your products (secondary) perspectives.)
that will guarantee you’ll make  Sales Maximization- Selling
money on each sale. as many units of a good or
 Profit Maximization - Setting service as possible, without
prices so that total revenue is making a loss(volume lng ang
as large as possible relative involved.)
to total costs. (gusto mo lahat
ng nagastos mo kumita ka pa at 3. Status Quo Pricing
macover lahat ng total cost - Copies the price level of its
(pinagsamang/ total sum variable
competitors or maintains the
cost at fixed cost) Set price to
cover all the expenses.)
current price level of similar
 Target Return on product or services in the market.
Investment - Net profit after  Maintain existing prices
taxes divided by total assets.  Meet competition’s prices
(no goal na kumita at sale volume. Goals
(Not focus on pricing. To know ay tumagal sa market.Typically, a
kelan babalik ung return ng income business wants to stay low run in the
of product(mo) market and doesn't want to disappear
from the industry. Want nila magexist)
-- Mataas revenue -Net profit , Mababang
revenue- net Loss --Status Quo- Ideal, walang ginagawa,
-- in term of price, profit has revenue chill and steady Object: Go to the flow.
considered seller the profit One market price will be ur price.
--PROFIT-focus on more profits and has Gagayahin mo ung iba or ung price na
high revenue. naset mo hindi mo mababago. Implement
-- Profit Ori- nagseset ng price sa isang ung price nung iba. D target na umikot ng
product/service asa producers or sellers puhunan. Go for the competitor. However,
and makukuhang income NET PROFIT adapt lang.
-- Sales Orien- Makabenta ng marami,
quantity/value. Objectives: Maraming
mabenta.
Price versus Demand versus  Inelastic Demand - An
Supply increase or decrease in
 Demand price will not significantly
The quantity of a product that will affect demand
be sold in the market at various
prices for a specified period. (Total Price VS Revenue VS Demand
amount/number desired by consumers.
Pertaining to all consumers including Price Revenue Demand
needs and wants.)
Goes… Goes… Is…
Supply Down Up Elastic
The quantity of a product that will Down Down Inelastic
be offered to the market by a Up Up Inelastic
supplier at various prices for a Up Down Elastic
specific period. (Total amount/number
desired by consumers. Pertaining to all
consumers including needs and wants.) ---Surplus- price mababa (mababa ang
demand)
---Shortage- mataas ang price(mataas
supply)
Demand Versus Price
- When the demand is increases ---Price high or low have influenced
the price is high QUOTIENT
-- GREATER 1- ELASTIC.
-- LESS THAN- INELASTIC
Supply Versus Price ---Uridary- pag may quotient
- When the supply is increases
the price is low ---ELASTIC-changes of prices, the
perspective of consumers slightly
Elasticity of Demand affected. (mataas ang price- response ng
consumers mbaba. tas mababa ang
- Consumers’ responsiveness or price- response ng consumers mataas)
sensitivity to changes in price.
---INELASTIC-high price of goods, hindi
 Elastic Demand - Consumers pa rin baba ung consumes HAHHAHA
buy more or less of a product
when the price changes
Chapter 2: Determinants of Price METHOD USED TO SET PRICE
1. Markup Pricing
- Cost
- Method of use to set Price  The cost of buying the
- Product Life Cycle product from the producer
plus amounts for profit and
COST for expenses not otherwise
- An amount that has to paid or accounted for.
spent to buy or obtain products E.g.
or services.  If a pen costs P1.80 and sells
for is P2.20
1. Payment How much the mark up?
2. Expenses P0.40
3. The amount or equivalent paid (P2.20 - P1.80) = P0.40
or charged for something
 How much the percentage of
mark up?
Types of Cost 22.22%
 Fixed (P0.40/P1.80) x 100 = 22.22%
- Do not deviate as level
of output changes
 Variable 2. Breakeven Pricing
- Deviate with changes - Which the price point at which
in level of output product will earn zero profit is
calculated.
PRODUCT LIFE CYCLE