Katarzyna Sawicz English Teacher
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Pricing - English for finance

7/15/2019

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Companies manufacturing goods set up prices using different strategies. The prices are influenced by production and distribution costs, however, there other factors which are taken into account:
  • MARK-UP / COST-PLUS PRICING - the unit cost (the expenses involved in producing each idividual product) is calculated and a percentage is added. 
  • MARKET PENETRATION PRICING - companies may decide to launch a product at a price giving them only a very small profit in order to gain a big market share (the proportion of total sales in the market), which later will allow them to gain bigger profits due to economies of scale (the cost of manufacturing  each unit decreases because the volume of production increases).
  • MARKET SKIMMING - there are products which will sell at any price because customers desire to buy them, e.g.  a new Apple phone. 
  • PRESTIGE PRICING / IMAGE PRICING - products considered luxurious and need to have a high price because the target customers probably won't buy them if the price is too low, e.g. Rolex.
  • GOING-RATE PRICING - if a product is very similar to competitors' products, companies may set the same price.

Retailers use also the following pricing strategies:
  • LOSS-LEADER PRICING - selling some items at a very low price that doesn't bring profit to attract customers who then buy more products which are profitable.
  • ODD PRICING / ODD-EVEN PRICING - many producers and retailers use a price of $19.95 and believe a customer will see it rather in the $19 price range than the $20.
Which of the strategies does your company use?

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    Katarzyna Sawicz

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    Key facts:
    - teacher of English
    - interpreter PL-EN, EN-PL
    - B.A in English Linguistics, M.A in Linguistics, Sworn and Business Translations, Financial Analysis and Reporting
    - over 18 years experience teaching and designing materials
    - experience teaching online to individuals and small groups
    - experience teaching in-company 
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