Introduction to business: distribution and pricing

CC-BY-SA

Transcript

1. Distributing and pricing
   cc licensed ( BY NC SD ) flickr photo by williamcho:
   http://flic.kr/p/6RNhKR
   

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2. Quiz
   • Closed book/closed notes
   • Put away phones until quiz is over
   • You may collaborate with your team
   • You are responsible for the answers on your
   quiz
   • You do not have to choose the same answers
   as your team
   

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3. marketing channels
   • wholesalers
   • retailers
   • direct
   

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4. Why not buy directly from manufacturer?
   CC licensed (BY-SA) wikipedia photo
   by Ryan Hildebrand
   https://commons.wikimedia.org/wiki/
   File:2017_Lincoln_MKZ.jpg
   

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5. What value do intermediaries add?
   • match buyers & sellers (fewer
   transactions)
   • provide market information
   • promotion & sales support
   • gather assortment of goods
   • transport & store goods
   • assume risks
   • provide financing
   

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6. distribution strategy
   •exclusive
   • selective
   • intensive
   Service/cost
   

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7. Supply chain management
   • Challenges?
   –Too much inventory?
   –Too little?
   • Electronic data interchange (EDI)
   • Vendor-managed inventory (VMI)
   • Bullwhip effect
   

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8. flickr photo by Swift
   Benjaminhttps://flic.kr/p/9Tf88T shared
   under a CC (BY) license
   Near beer game
   http://forio.com/simulate/mbean/near-beer-game/run/
   

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9. pricing strategy
   cc licensed ( BY NC ND ) flickr photo
   by Roadsidepictures:
   http://flic.kr/p/4hVtfA
   

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10. flickr photo by https://flic.kr/p/dgaFig shared under a CC (BY-NC-ND) license
    

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11. flickr photo by improbcat https://flic.kr/p/5idoUS shared under a Creative Commons
    (BY-NC) license
    

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12. flickr photo by pyntofmyld https://flic.kr/p/7Y2S4L shared under a CC (BY) license
    

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13. flickr photo by Concavo Wheels
    https://flic.kr/p/jwdgBg shared under a CC (BY) license
    

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14. flickr photo by Dave Pinterhttps://flic.kr/p/5KVmo4 shared under a CC (BY-NC-ND) license
    

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15. Pricing strategies
    • Objectives?
    –achieve profit
    –build traffic
    –build market share
    –increase sales
    –create image
    

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16. Pricing approaches
    • Penetration
    • EDLP
    • High/low
    • Loss-leader
    • Prestige
    • Skimming
    • Cost-based
    • Target costing
    • Demand-based
    • Odd
    

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17. Breakeven analysis
    =
    
    ( − )
    Fixed cost:
    $5000 rent/mo
    $5000 payroll
    Price: $4
    Variable cost: $1
    

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