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Entrepreneurship

Entrepreneurship. Mr. Bernstein Pricing Strategy, pp 230-247 April 3, 2014. Entrepreneurship Mr. Bernstein. Factors Affecting Price Costs – Fixed or Variable Supply and Demand Consumer Perceptions Competition What are your objectives? Return on Investment Gaining Market Share

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Entrepreneurship

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  1. Entrepreneurship Mr. Bernstein Pricing Strategy, pp 230-247 April 3, 2014

  2. EntrepreneurshipMr. Bernstein Factors Affecting Price Costs – Fixed or Variable Supply and Demand Consumer Perceptions Competition What are your objectives? Return on Investment Gaining Market Share Cash Flow / Survival

  3. EntrepreneurshipMr. Bernstein Pricing Strategy Approaches Cost-Based Pricing Cost plus markup Demand-Based Pricing “What the market will bear” Competition-Based Pricing “Price Takers” Flexible or One-Price Policy What approach(es) would you use? Why?

  4. EntrepreneurshipMr. Bernstein Pricing Techniques Psychological pricing: Prestige pricing Odd/even pricing Price lining Promotional pricing Multiple Unit discounts Bundle pricing What are examples of each?

  5. EntrepreneurshipMr. Bernstein Analyzing Pricing Break-even Analysis: Number of units that must be sold to cover fixed costs Fixed Costs / (Unit Selling Price – Variable Costs) = Break-Even Point

  6. EntrepreneurshipMr. Bernstein Analyzing Pricing Markup: Amount added to the cost of an item Cost + Markup = Price Markup / Cost = Percentage Markup AKA “Gross Margin”; doesn’t include overhead costs

  7. EntrepreneurshipMr. Bernstein How often should pricing be revised? Elastic demand – revise often Do you compete primarily on price, service or quality?

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