Chapter Name: Elements of price setting policy
Description:Introduces pricing methods (cost-based, value-based, competitive).
Purpuse:To establish pricing aligned with business goals and market position.
Rational:Affects revenue generation and competitive viability.
Chapters Topics
The flow of the trading cycle
The trading cycle refers to the process of buying and selling goods or services, including stages such as procurement, production, sales, and payment. Understanding this flow helps businesses optimize pricing strategies and improve cash flow management.
The concepts of costing and pricing
Costing involves determining the total cost incurred in producing a product or service, while pricing is setting a price that covers costs and generates profit. These concepts are fundamental in developing sustainable pricing strategies.
The differences between fixed costs, variable costs and total costs
Fixed costs remain constant regardless of production volume (e.g., rent, salaries), while variable costs fluctuate with production levels (e.g., raw materials). Total costs are the sum of fixed and variable costs. Understanding these costs is key to pricing decisions.