Cover costs покривати затрати

pursue unsound price policies вести нерозумну цінову політику

supply and demand попит і пропозиція

price competition конкуренція в ціноутворенні

set prices встановлювати ціни

All products and all services have prices. The price depends on different things such as credit terms, delivery, guarantees, quality and other forms of service, which price can produce the biggest profit during a long period of time. it’s hardly possible to determine such a price. The price may be too high to produce a large volume or too low co cover costs. No other area of marketing operations has been a subject to bad practice. Many business pursue unsound price policies for long periods of time and are not aware about it.

Prices can be determined in different ways. For example, the prices on meat, cotton and other agricultural products can be decided in a large central market where forces of supply and demand exist. This is pure price competition. The prices on industrial products (iron, steel, etc.) are usually decided by large companies. As a rule the amount and price of goods sold to the large number of buyers are controlled by a few competing sellers. Prices also can be set by thegovernment, usually for different public services – railroads, electricity, manufactured gas, bus services, etc.

If demand increases, price rise, profits expand and new investment is attracted. But other factors may be involved as well. Prices are related to each other in different ways. Ultimately, everything is related by price, since the consumer can buy and must pay for everything out of a particular, limited amount of money.

Exercise 1. Put the necessary word in the sentence:

supply and demand, volume of sales, compete, price policies, credit terms, set prices.

1. It is very difficult … without sound price policy.

2. Of course we are interested in producing the …with the lowest unit costs.

3. The … of this store are very beneficial for a customer.

4. Their business will fail if they pursue unsound ….

5. The government usually … for public utility services.

6. In pure competition the forces of … operate.

Exercise 2. Answer the following questions:

1. Why is it difficult to determine the right price?

2. Why is the seller interested in the price that produces the highest volume of

sales at the lowest unit cost?

3. Why do many business follow unsound pricing policies?

4. In what way are agricultural prices decided?

5. How are industrial products usually priced?

6. Why does the government usually set the prices for public utility services?

7. Why is it so important to know the levels of supply and demand when

dealing with the pricing?

8. Why is everything related by price?

Exercise 3. Read the dialogue:

Introducing a new line…

Dick is introducing a new line of products and is talking to his friend Tom, a business consultant, about it.

Dick:	It’s the first time when I’m in business for myself.
Tom:	Don’t worry. The store has always been doing well. It has a great locationand as far as your new line of merchandise…
Dick:	That’s what I wanted to talk to you about. Can you give some ideas how to charge the price?
Tom:	With pleasure. Generally, there are two types of pricing policies. There is emphasisand price de-emphasis.
Dick:	What’s the difference?
Tom:	The price emphasis policy emphasizes low prices. This encourage sales. But low prices doesn’t give extra services.
Dick:	So, a really low prices means no credit, home delivery, repair, installation, and other services.
Tom:	That’s what I mean. But many people are interested only in the low price and not in the extra services.
Dick:	Yes, and vice versa. The price which I set determines the number of sales. I must think thoroughly about it.
Tom:	A good example of price emphasis is loss-leader pricing. It means that you choose one item - let’s say an electric razor – at a price just above the cost. The customers will come to your shop to buy this loss-leader item. But since they are inside they can decide to buy a few other things they need.
Dick:	It sounds interesting. What other things can you tell?
Tom:	There is also off-even pricing. Let’s say you sell a tape-recorder for $99, 95 instead of $ 100. thought it is in fact about the same, the low price can produce a favorable psychological effect.
Dick:	What are the other ways to attract the customers?
Tom:	First of all, remember that you are going to compete with well-known products, so you should start with specially low prices. It’s important to advertise this. You should use newspapersaids,maybe aradio spot,maybe do a big windowand floor display.
Dick:	It makes sense.
Tom:	And you can rise the price after your customers try a new brand, get to know it and like it. They will continue to buy it.
Dick:	I see. And what is the price de-emphasis you mentioned before.
Tom:	It concerns high quality expensive items. Price de-emphasis means that you don’t call attention to the price at all.
Dick:	I know, it concerns our fine jewelry department or designer fashions.
Tom:	Yes, I see you are going to do well.
Dick:	Your suggestions seem to be very useful. Don’t forget you have a discount on any shopping you do in my shop.

Active vocabulary

location місцезнаходження

charge the price встановлювати ціни

price emphasis продаж товарів за низькою

ціною

extra services додаткові послуги

loss-leader товар, який продається за

низькою ціною

для приваблення клієнтів

off-even pricing ціна, яка не доходить до круглої

Дата добавления: 2015-05-26