1. Chapter 9
Pricing

2. product cost-plus pricing markup manufacturing business
Pricing, Costing, and Growth
Chapter 9
pricing
product cost-plus pricing
markup
manufacturing business
product costing
cost behavior
variable costs
direct materials
direct labor
fixed costs
contribution margin
break-even point
market penetration
target profit
target sales
margin of safety

3. Pricing, Costing, and Growth
Chapter 9

4. Pricing Goals of Pricing
Pricing, Costing, and Growth
Chapter 9
Pricing
Section 1
Goals of Pricing
To generate sales that produce a specific profit
To obtain a given share of the market
To meet competitors’ prices

5. Value Basis Prices Are Determined by How the Customer Values:
Pricing, Costing, and Growth
Chapter 9
Section 1
Merchandise Pricing and Costing
Selling Price
Quality
Value Basis Prices Are Determined by How the Customer Values:
Service
Availability
Product Benefits

6. Pricing, Costing, and Growth
Chapter 9
Section 1
Merchandise Pricing and Costing
Making a profit is always at the top of a business’s goals. Explain why an increase in prices may not lead to an increase in profits.
Profits will not increase if the costs and expenses also increase (or increase at a higher rate), or if sales volume goes down because of the higher prices.

7. Sources of Business Growth
Pricing, Costing, and Growth
Chapter 9
Sources of Business Growth

8. Sources of Business Growth
Pricing, Costing, and Growth
Chapter 9
Sources of Business Growth
Advantages of Franchising
Expanding with someone else’s money
Easily managing a growing organization
You do not have to oversee the workforce
Disadvantages of Franchising
It’s like starting your business all over again
Preparation of training manuals
Legal, accounting, and consulting costs
A possible wait of three to five years before profit
Individuals
Organizations

9. The Challenges of Growth
Pricing, Costing, and Growth
Chapter 9
Market Characteristics
Systems and Controls
Multiple Sites
Factors That Affect the Ability of a Business to Grow
Industry Innovation
Delegation

10. Planning for a Successful Future
Pricing, Costing, and Growth
Chapter 9
Planning and Growth
Section 2
Planning for a Successful Future
Make sound financial decisions for short- and long-term goals.
Set realistic financial targets.
Control expenses and costs.
Analyze financial statements frequently.
Analyze your competition.
Evaluate current economic conditions.
Maintain a reserve fund.
Individuals
Organizations

11. Pricing, Costing, and Growth
Chapter 9
Supply and Demand
When supply is greater than demand, business owners may lower the price in hopes of increasing demand.
DEMAND
SUPPLY
PRICE
QUANTITY