Lesson 13.

Pricing.

All products and all services have prices. The price depends on different thing such as credit terms, delivery, trade-inallowance, 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 to cover costs. No other area of marketing operations has been a subject to bad practice. Many businesses persue 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 of meat, cotton and other agricultural prices can be decided in 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 large number of buyers is controlled by a few competing sellers. Prices also can be set by the government, usually for different public services-railroads, electricity, manufactured gas, bus services, etc.

If demand increases, prices 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 in price, since the consumer can buy and must pay for everything out of a particular, limited amount of money.

credit terms                                          кредитные условия

trade-in allowance                         сумма денег, отданная за старую вещь и включенная в счет покупки новой

to cover costs                                      покрывать затраты

to persue unsound price policies        вести неразумную ценообразовательную политику

supply and demand                            предложение и спрос

price competition                               конкуренция в ценообразовании

to set prices                                        устанавливать цены

Comprehension 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 businesses 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 pricing?

8.     Why is everything related by price?

Vocabulary practice

Choose the necessary word and put it in the sentence.

1.     It is very difficult … without sound price policy.   | 1. supply and

2.     Of course we are interested in producing the … with the lowest unit costs.  | 2. volume of sales

3.     I decided to buy a new car at this company because they offered the best … on my old model.         | 3. trade-in allowance

4.     The … of this store are very beneficial for a customer.         | 4. compete

5.     Their business will fail if they persue unsound … .              | 5. price policies

6.     The government usually … for public utility services.   | 6. credit terms

7.     In pure competition the forces of … operate.     | 7. to set prices

location                                            место расположения

extra services                                   дополнительные услуги

installation services                         услуги по установке

to charge prices                                устанавливать, назначать цены

price emphasis                                 продажа товара за счет низкой цены

price de-emphasis                            попытка продажи товара не за счет низкой цены, а за счет других факторов

loss-leader item                                товар, продаваемый по очень низкой цене, служащей для привлечения покупателей

off-even pricing                               цена, не доходящая до круглой цифры и стимулирующая желание покупателя купить

favorable psychological effect          благоприятный психологический эффект

to start with especially low prices     начинать с особо низких цен                          

new brand                                          новая марка (товара)

high quality expensive item              высококачественный дорогой продукт

Exercise 3. Answer the questions.

1.     In what way were the prices charged in this country?

2.     What is your idea of the term market price?

3.     What type of pricing policy works with the majority of consumer goods? (price-emphasis, price de-emphasis)

4.     What is more preferable for you in pricing: low prices with no extra services or high prices with home delivery, repair and other services?

5.     Why is it so important to have loss leader item in a shop?

6.     What is off-ever pricing made for?

7.     How can your pricing policy help to compete with well known products?

Exercise 4. Translate into English (стр. 86).

1.     Этот магазин предоставляет покупателю выгодные кредитные условия.

2.     Товар имеет низкую цену. Она покроет затраты.

3.     Эта фирма ведет неразумную ценообразовательную политику.

4.     Прежде чем выпускать товар, необходимо тщательно изучить спрос и предложение.

5.     Государство устанавливает цены на ряд продуктов.

6.     Магазин имеет превосходное место расположение.

7.     Супермаркет предоставляет покупателю много дополнительных услуг: доставку товаров на дом, кредит, установку и т.д.

8.     Новая марка несомненно привлечет покупателей.

9.     Начинайте с низкой цены.

10. Продажа за счет низкой цены действует при продаже товаров народного потребления.