Unit 1. Price . Basic knowledge of pricing 1. Cost structure: cost of production, selling and delivery costs, taxes and a. Cost of production e Costs related to the product manufacture: labor, raw materials, component parts, salaries, heating lighting, general maintenance of the factory building and plant ●Othe ancillar costs directly allocated to the product warehousing/storage, distribution involving inter-factory transfer handling, assembly costs b. Selling and delivery costs O Fixed costs: salesman's salaries e Variable costs: packaging, transport, commissions, advertising and sales trip expenses, insurance premium C. Customs duties: other costs factors taken into account by the exporter 2. Points to be considered in pricing: be acceptable to the customers generate enough revenue to cover all its costs a. International market level: relevant market data on competitive prices for similar products b. Policies and regulations: those apply ing to a particular market area c. Exporters' purpose and importers' requirements d Supply and demand relationship the world market may fluctuate(rising or falling of the market prices) with the change of it e. Others o Adequate profit margin over your actual costs
Unit 1.Price I. Basic knowledge of pricing 1.Cost structure: cost of production, selling and delivery costs, taxes and tariffs. a. Cost of production ⚫ Costs related to the product manufacture: labor, raw materials, component parts, salaries, heating & lighting, general maintenance of the factory building and plant. ⚫ Other ancillary costs directly allocated to the product: warehousing/storage, distribution involving inter-factory transfer handling, assembly costs. b. Selling and delivery costs ⚫ Fixed costs: salesman’s salaries ⚫ Variable costs: packaging, transport, commissions, advertising and sales trip expenses, insurance premium. c. Customs duties: other costs factors taken into account by the exporter. 2. Points to be considered in pricing: be acceptable to the customers; generate enough revenue to cover all its costs. a. International market level: relevant market data on competitive prices for similar products b. Policies and regulations: those applying to a particular market area c. Exporters' purpose and importers' requirements: d. Supply and demand relationship: the world market may fluctuate (rising or falling of the market prices) with the change of it. e. Others: ⚫ Adequate profit margin over your actual costs
e Details of the contract: quality and quantity of the products, transportation costs, place and terms of delivery etc e Method of payment and fluctuations of foreign exchange rates 3. Approaches to pricing strategies e Based on price range: high, low and moderate Based on market areas: ethnocentric, polycentric and geocentric pricing Cost-oriented pricing methods以成本为导向的定价法 a. Break-even pricing损益两平定价法: a method of determining th quantity of sales where the firms revenues will equal its costs b. Cost-plus pricing成本加成定价法: a method of adding to a basic cost figure, an amount to cover profit and other unassigned costs c. Marginal cost pricing边际成本定价法: a method of calculating the extra production costs involved I Terms. Price noun:skimming price/loaded price/market price/competitive price/cost price/basic price/invoice price verb: go up/mark up/increase/rise/advance/raise/improve/lift/come down/mark down/drop/fall/decline/cut down/reduce/bring down adi: reasonable/practicable/popular/on the low side/in line with the market level/ workable/attractive/low/high/on the high side/out of line with the market level Profit make a profit/gain profit/net profit/total profit/profit after tax/profit before tax/profit margin/profit ratio/average rate of profit/to reap fabulous profit/ quick profits(easy profits)
⚫ Details of the contract: quality and quantity of the products, transportation costs, place and terms of delivery etc. ⚫ Method of payment and fluctuations of foreign exchange rates 3. Approaches to pricing strategies ⚫ Based on price range: high, low and moderate ⚫ Based on market areas: ethnocentric, polycentric and geocentric pricing Cost-oriented pricing methods 以成本为导向的定价法 a. Break-even pricing 损益两平定价法: a method of determining the quantity of sales where the firm’s revenues will equal its costs. b. Cost-plus pricing 成本加成定价法: a method of adding to a basic cost figure, an amount to cover profit and other unassigned costs. c. Marginal cost pricing 边际成本定价法: a method of calculating the extra production costs involved. II. Terms: Price noun: skimming price/loaded price/market price/competitive price/cost price/basic price/invoice price verb: go up/mark up/increase/rise/advance/raise/improve/lift/come down/mark down/drop/fall/decline/cut down/reduce/bring down adj.: reasonable/practicable/popular/on the low side/in line with the market level/workable/attractive/low/high/on the high side/out of line with the market level Profit: make a profit/gain profit/net profit/total profit/profit after tax/profit before tax/profit margin/profit ratio/average rate of profit/to reap fabulous profit/ quick profits(easy profits)
