Packet- Funeral Merchandise Pricing Flashcards
The difference between merchandise cost and selling price.
Markup
The percentage derived by dividing the wholesale cost of the merchandise by the retail price of the merchandise.
Consumer Value Index (CVI)
Wholesale Cost / Retail Price =
CVI
The relationship between the wholesale cost of the merchandise and the total cost (both service and merchandise) to the consumer.
Merchandise Value Ratio (MVR)
Wholesale Cost / (Total of merchandise and services)=
MVR
- Fixed dollar amount
- Fixed multiple
- Percent
- Graduated recovery
- Increasing graduated recovery
- Decreasing (declining price structure)
- Modified graduated recovery
Pricing Strategies
Pricing so that actual price figures are familiar to the consumer. Typically ends in 5,7,9, or 0.
Consumerized Pricing
- Competition’s price policies
- Legislation
- Production costs
- Distribution costs
- Economic fluctuations
- Type of merchandise
- Marketing strategy
- Purchasing practices
- Selling costs
- Value
The Price of the Funeral is Influenced by:
- Average (mean)
- Median
- Mode
- Range
Sales Analysis
The sum of a group of numbers divided by the number of units.
Average (Mean)
A value in an ordered set of numbers which represents the midpoint, an equal number of values above and below the midpoint value.
Median
The value that occurs the most frequently in a group of numbers.
Mode
The upper and lower limits in a series of numbers. Subtract the lowest number from the highest to find this.
Range
- Traditional Selection Room
- Distributor Showroom
- Catalog
- Computer based display
- Many funeral homes use a combination of these things.
Ways to Display Merchandise
- Control over merchandise offered and the manner of display.
- Minimal inconvenience for consumer.
- Merchandise tangibly displayed.
Advantages of the Traditional Selection Room
- Overhead expense is increased
- This higher overhead is reflected in the bill
- Use of valuable floor space.
Disadvantages of Traditional Selection Room
- Overhead reduced
- This translates into either reduced consumer expense of increased funeral home profit.
Advantages of Distributor Display Room
- Trip to the showroom may not be convenient for consumer
- Possible delivery problems
- Funeral home has little say in product offerings
- May be necessary to schedule an appointment
Disadvantages of Distributor Show Room
- Overhead expense is reduced
- For some consumers- easier emotionally
- Useful tool when making arrangements in the home.
- May be able to offer greater range of merchandise.
Advantages of Using a Catalog
- Difficult to discern value through a photo
- Extra attention to good presentation
- Catalogs with less-than-professional appearance may reflect negatively.
Disadvantages of Using a Catalog
- Less threatening to some consumers
- Reduced overhead
- Inventory checks and product ordering may be performed instantly
Advantages of Computer Based Display
- Some consumers not comfortable with computers- particularly the elderly.
- Initial investment is substantial
- Product delivery/availability may be an issue.
- Funeral Director must deliver a thorough product presentation.
Disadvantages of Computer Based Display
