4th Six Weeks Flashcards
Where costs cover overhead and desired percentage of profit.
Cost-Plus Pricing
Determined by the optimum combination of volume and profit.
Demand Price
Generally used when there’s an established market price for a particular product or service.
Competitive Pricing
Calculated by adding a set amount to the cost of a product, which results in the price charged to the customer.
Markup Pricing
All nonlabor expenses required to operate your business.
Cost of Goods Sold
The difference between total sales and the cost of those sales.
Margin
The wages and benefits that go to the employees.
Labor
The amount of money invested in the production of a product.
Material Costs
Includes rent, utilities, and insurance that are paid monthly, regardless of sales.
Overhead
The amount of income earned after all costs for providing the service have been met.
Profit
1st characteristic of product mix: the number of product lines the company sells.
Width of Product Mix
2nd characteristic of product mix: the total number of products or items in your company’s product mix.
Length of Product Mix
3rd characteristic of product mix: the total number of variations for each product. Variations can include size, flavor and any other distinguishing characteristic.
Depth of Product Mix
4th characteristic of product mix: how closely related product lines are to one another–in terms of use, production and distribution.
Consistency of Product Mix
5th characteristic of product mix: usually starting out with a product mix limited in width, depth and length; and have a high level of consistency.
Strategy of Product Mix
1st step in product life cycle: where new product ideas are generated, operationalized, and tested.
Product Development Stage
2nd step in product life cycle: costs are very high, slow sales volumes to start, and little or no competition.
Market Introduction Stage
3rd step in product life cycle: costs reduced due to economies of scale, sales volume increases significantly, and profitability begins to rise.
Growth Stage
4th step in product life cycle: costs are lowered as a result of increasing production volumes and experience curve effects, sales volume peaks and market saturation is reached, and new competitors enter the market.
Maturity Stage
5th step in product life cycle: costs increase due to some loss of economies of scale, sales volume declines, and prices and profitability diminish.
Decline Stage
Lowering of price of a product or service with the aim of increasing sales is a price adjustment tactic.
Price Adjustment
Increasing advertising for the purpose of increasing brand awareness.
Augmented promotion
Typically involves opening of new methods of sales through focusing on a particular method.
Distribution Channels
Performing slight adjustments with the product and it’s packaging to appeal more strongly and increase sales revenue.
Improving Products
