Price floor

Price floor - Price floor-the minimum price below which a...

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Unformatted text preview: Price floor-the minimum price below which a product should not be priced Skimming-charge the highest possible price that customers who most desire the product will pay Penetration-using low profit margins to generate greater sales; usually used to quickly gain market shares Loss leaders-pricing specific products at a point that will not generate any profits; purpose is to build traffic Automatic markdowns-placing a predetermined markdown on merchandise that remains unsold after a given period of time Markdown percentage-a control tool used by buyers that is calculated by dividing total dollar markdowns by total sales Markdown percent= dollar markdown/total sales Off-retail percentage-percentage used for advertising purposes that is calculated by dividing the amount of markdown by the original retail price Off-retail percentage= markdown/original retail price Markdown cancellation-increases in the retail price to offset all or part of previously taken markdowns Additional markups-or increases in retail price; mostly likely to occur for basic merchandise items as wholesale price increases...
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This note was uploaded on 02/13/2012 for the course HUEC 3042 taught by Professor Liu during the Fall '08 term at LSU.

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