
- •Череповецкий государственный университет
- •Кафедра экономики
- •Современный бизнес
- •Contents
- •Введение
- •Unit 1. The effects of demand and supply on business
- •1.1. Markets
- •Test Questions
- •Case study ‘Understanding the Market’
- •1.2. The Operation of Markets
- •If social costs exceed social benefits, the decision to produce a good or service makes society worse off even if the producers make a profit.
- •If social costs are less than social benefits, the decision to produce a good or service will make society better off. Test Questions
- •Case study ‘Record Industry’
- •1.3. The Effects of Government Policy on Markets
- •Indirect taxes
- •Test Questions
- •Unit 2. The competitiveness of a firm
- •2.1. The Performance of an Industry
- •International Trade
- •International comparisons
- •2.2. Government Action to Improve Competitiveness
- •2.3. Government Action and International Trade
- •2.4. Business Competitive Strategies
- •Test questions
- •Case Study
- •Unit 3. Business Organisations
- •3.1. Types of Business Organization
- •3.2. Organizational Structures
- •3.3. Factors Influencing the Organisational Structure
- •Internal factors
- •Test Questions
- •Case Study ‘Business Organisation & Structure’
- •Unit 4. Administrative systems
- •4.1. The Purpose of Administrative System
- •4.2. Administration Functions in Business
- •4.3. Evaluating Administrative Systems
- •4.4. Information Technology in Administration
- •Test Questions
- •Case Study ‘Satellite Supplies’
- •Unit 5. Communications Systems
- •5.1. Why Do Businesses Need Communications System?
- •5.2. The Objectives of Communication
- •5.3. Verbal Communication
- •Internal communications
- •5.5. Evaluating Communication Systems in Business
- •Test Questions
- •Case Study ‘Can You Communicate?’
- •Unit 6. Information Processing
- •6.1. The Purposes of Information Processing
- •6.2. Types of Information Processing Systems
- •Information Technology: positive and negative effects
- •6.3. Evaluating Information Processing Systems
- •Test Questions
- •Case Study “Information Technologies in Business”
- •Unit 7. The principles and functions of marketing
- •7.1. What is Marketing?
- •7.2. The Objectives of Marketing
- •7.3. Implementing the Marketing Mix
- •Test Questions
- •Unit 8. Market Research
- •8.1. What is Market Research?
- •8.2. Sources of Marketing Information
- •Information requirements
- •Internal sources
- •8.3. Primary Research
- •8.4. Market Changes
- •Information on sales
- •Test Questions
- •Case Study ‘Sun Rush’
- •4M Brits shrug off gloom in sun rush
- •Unit 9. Marketing Communications
- •9.1. Targeting an Audience
- •9.2. How to Reach a Target Audience
- •9.3. Product Performance
- •9.4. Guidelines and Controls on Marketing Communications
- •Test Questions
- •Case Study ‘Marketing Communication’
- •Unit 10. Customer Service and Sales Methods
- •10.1. ‘The Customer Is Always Right’
- •10.2. Placing the Product – Distribution
- •Indirect distribution via intermediaries
- •10.3. Closing the Sale
- •Test Questions
- •Case Study ‘Company Handbook’
- •Unit 11. Production
- •11.1. What is Production?
- •11.2. Just in Time Production and Total Quality Management
- •11.3. Improving the Productivity of Labour
- •11.4. Health and Safety at Work
- •11.5. Reducing Pollution from Production
- •In the working environment
- •In the natural environment
- •Test Questions
- •Case Study ‘Production and Productivity Consulting’
- •11.6. The Costs of Production
- •Identifying business costs
- •Indirect costs
- •Insurance
- •Variable costs
- •Test Questions
- •Case study ‘Waterhouse Waffles’
- •Unit 12. Pricing decisions and strategies
- •12.1. The Pricing Decision
- •12.2. Cost-Based Pricing
- •12.3. Market-Based Pricing
- •12.4. Competition-Based Pricing
- •12.5. Problems with Demand- and Competition-Based Pricing
- •Test Questions
- •Case Study ‘What Price Promotion?’
- •Unit 13. Monitoring business performance
- •13.1. Accounting for Business Control
- •13.2. Budgetary Control
- •Variance analysis
- •13.3. Ratio analysis
- •Test Questions
- •Case Study ‘Business Performance’
- •Unit 14. Preparing a business plan
- •14.1. What Is a Business Plan?
- •14.2. The Purposes of a Business Plan
- •14.3. Legal and Insurance Implications
- •Insurance
- •14.4. Business Resources
- •14.5. Potential Support for a Business Plan
- •Some review questions
- •Unit 15. Producing a Business Plan
- •15.1. Business Objectives and Timescales
- •15.2. The Marketing Plan
- •15.3. The Production Plan
- •15.4. The Financial Plan
- •15.5. Conclusion
- •Some Review Questions
- •Case Study ‘Business Plan’
12.3. Market-Based Pricing
Demand based pricing
Market- or demand-based pricing strategies tend to involve pricing products at ‘what the market will bear’. That is, producers will price high if consumer demand is high. For example, high prices are often charged for unique products, like rock festivals and designer clothes, because demand will normally outstrip supply.
Instead of reflecting what the product costs to produce, demand-based pricing asks: ‘At what price will this product sell?’ In adopting this approach, firms will need to carry out careful market research to find out what consumers are willing to pay, and also study the pricing policies of their competitors. Only then will they be able to produce a good or service with the right design and quality to fit the market, and at the right cost to yield a profit.
Market skimming. This strategy, also known as price creaming, is often used when there is little competition in a market. It involves charging a high price for a new product to yield a high initial profit from consumers who are willing to pay extra because the product is new and unique. As competitors enter the market, prices are reduced to encourage the market to expand. Market skimming is a practice often observed in markets for audio and video products. For example, Sony and Phillips were the first manufacturers to release compact disc players in the UK during the mid-1980s. Initially, the players were priced at £500 or more. By 1995, there existed a bewildering variety of CD players, some priced as low as £50.
Penetration pricing. This strategy is used by firms trying to gain a foothold in a new market. It is a high-risk, high-cost strategy that tends to be confined to large firms who supply mass markets. Penetration pricing involves setting product price low to encourage consumers to try the product and to build sales. This will also encourage retailers and wholesalers to stock the product and in doing so reduce their demand for competitors’ goods and services. In addition, the firm may boost sales by lowering price if demand is price-elastic. Cutting price tends to increase total sales revenue if demand is price-elastic. However, in markets where the supply side is very competitive, a price war may develop among rival firms. Any rise in sales from price cuts may be short-lived, as rival firms slash prices in an attempt to retain their market shares. It is often said that only the consumer wins in a price war.
Expansion pricing. This is similar to penetration pricing. Product prices are set low to encourage consumers to buy. As demand increases, the firm is able to raise its level of output and take advantage of economies of scale, which will lower the average cost of producing each unit. Lower average costs can either be passed on to consumers as lower prices, or, if prices are held steady, the lower costs will increase the firm's profit margins.
Price discrimination. This is used when a firm is able to charge different prices to different groups of consumers. For example, British Rail has different prices for peak and off-peak travel. Similarly, British Telecom charges different rates for telephone calls made at peak and off-peak times. Price discrimination is only possible when consumers are unable to undercut higher prices by reselling the product from low-price markets to higher-priced ones. Thus, it is often possible to charge different prices for the same product or service in different regions of the country or world, if the cost of sending the product elsewhere more than offsets any saving in price between areas.