On the other side, low-income earners are not expected to purchase the company products in bulk or frequently. Nevertheless, consumer income is widely affected by the rate of inflation which determines the amount of money they receive as salaries and wages as well as the prices of the company’s product. Inflation is widely defined as the continued increase in prices of products and consumers.
6.1.2 Price Price is the value or amount that customer pays to buy a product. For instance, for our Star Lab ice cream shop, we need to consider the cost of production of our ice cream, price of our main competitor and our potential customers demographics in order to succeed this competitive market. (C. Breidert, 2007, p.9) 22.214.171.124 Pricing Strategy Pricing strategy that can be used by our company such as penetration pricing, cost-plus pricing, value based pricing and more. But we think that market penetration pricing is the best pricing strategy to be used by our business. Market penetration pricing is about setting a lower price on our product with aim to attract customers to buy our product because of the cheaper price compare with other competitor.
In observation, the doughs which are made from wheat flour and whole wheat flour are baked at different temperature which are 150 °C, 190 °C, 220 °C will have the different texture for crust and the crumb in 10 minutes, 20 minutes or 30 minutes. For the
If there is a comparison with regard to price, the cheaper rival will stress on that fact and try to bring to fact that the consumer is getting the similar product at a lesser price. The factor that the brand will bank on is the price. On the other hand, if the comparison is made on the basis of quality, then automatically the brand will try to portray that the quality is far superior to the other brands. The basic criteria that has to be kept in mind is that the comparison has to be malicious and untrue. The statements made to promote one's product had to be false.
STEP 1: Subtract each discount from 100% 100% - 5% = 95% 100% - 10% = 90% STEP 2: Multiply them together. 95% X 90% 0.95 X 0.90 = 0.855 ( Net price equivalent rate ) Net price = List Price X Net Price Equivalent Rate = ( $1,000 X 6 fireplaces ) X 0.855 = $5,130 d) What are the steps to calculate the single equivalent discount rate and how to get the trade discount? Firstly, we must compute the complement of each rate. Next, multiply all the complement rate as decimal and write the product as a percent. Then, subtract the product from 100% to get the equivalent single discount rate.
A bargain purchase is recognized as a gain as of the acquisition date. Goodwill Often a purchaser will pay more to acquire a subsidiary than the fair value of the net assets acquired. The market value of the acquired is often more than the value of its net assets. Also, an acquirer may see future cost savings by combining the companies, so it’s willing to pay extra. This difference between the purchase price paid to acquire a subsidiary, and the fair value of the net assets acquired is called purchased goodwill, or just ‘goodwill’.
Inflation occurs when the buying power of a dollar decreases. “As inflation rises, every dollar you own buys a smaller percentage of a good or service. When prices rise, and alternatively when the value of money falls you have inflation” (Hayes). For this reason a minimum wage increase would never work. If employers are paying employees more then they will raise costs to offset the added expenses.
Adverse selection is an economics term means an undesired result happens which the quantity and the price of goods or services altered because of sellers and buyers have different or imperfect market information. For example, executives may more willingly issue shares when the share price is overvalued compared to the real value, buyers will finally buy the overvalued shares and lose money. If the company charges an average price but only the consumer who can pay more buy, the company takes a financial loss by paying out more benefits. Due to adverse selection may lose some of the customers, and we assume that every company should be profit maximization, moral hazard is more widespread than adverse selection in a company. We will discuss few major issues regarding tackling moral hazard under the CG requirements: Issue 1 – executives should act in the best interests of the company and
As such the seller is at the liberty to quote the price he feels right. Most of the times the seller charges higher price for the product as he knows his products are produced exclusively by him. • Consumer exploitation: as there is very little or no completion in a monopolist market, consumers tends to get exploited in terms of higher price, substandard or low quality goods etc. since the consumers have no option but to buy the products offered by the seller. • Customer dissatisfaction: higher price for the product, low quality goods or services, lack of choice among products leaves the customers dissatisfied.
All customers are able to exert pressure to push down prices, or increase the required quality for the same price, therefore reduce revenues in the industry. Ship Service business is based on two main core factors price and quality of service. Price refers to services that can be performed on request such as crew medical assistance, cash to master, vessel boarding etc. Another factor service refers to processing of documents, bill of lading etc. It is rather difficult for customers to get better quality of service than getting competitive rates.