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* Chapter 9 Terms of Price What Is Price? Price is the amount of money that is needed to acquire some combination of a product and its accompanying services. Price is also a critical ingredient in consumer evaluation of the product. Pricing means a series of techniques relating to a single product or a group of products 9.1 Price Elements Cost structure Factor considerations in Pricing Cost Structure Cost of production Selling and delivery costs Customs duties Cost of Production The sum of the costs of materials, fabricating and/or other processing employed in producing the merchandise sold in a home market or to another country together with appropriate allocations of general administrative and selling expenses. Selling and Delivery Costs Fixed costs: salesmen’s salaries etc. Variable costs: packaging, transport, commissions, advertising and sales trip expenses, insurance premium etc. Customs and Duties Customs duties are taxed imposed by a government on the import or export of products or services. They should be taken into account when the price is set. Factor Considerations in Pricing I Principles for setting the price 1.? The price on the bases of the price in the international market. 2. Prices vary with regions and countries according our foreign policies 3.? The price should be set according to the marketing purposes. 4. Watch the change of supply and demand relationship and the trend of rising or falling of the market prices II Consideration of factors affecting the prices 1.?? Qualities of the goods 2.???Distance of transportation 3.???Place and terms of delivery 4.?Changes of demand according to the seasons 5.?? Quantities 6. Terms of payment and fluctuations of the exchange rates ? 9.3 Price Calculations Conversion of major trade terms Calculation of the cost Conversion of Major Trade Terms 已知FOB价 求 (1)?CFR价=FOB价+国外运费 ? FOB价+国外运费 (2) CIF价=----------------------------------
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