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CLEP Principles of Marketing Study Notes

The package can be a vital part of a product by

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The package can be a vital part of a product, by making it more versatile, safer, or easier to use. The package for some products can be considered part of the product. A Markup is a predetermined percentage or dollar amount which is added to the cost of the product to derive a product's selling price. Many retailers and wholesalers use Markup Pricing, where they simply use a standard percentage markup to set selling prices. Markups are usually calculated as a percentage of the selling price, rather than a percentage of the cost. To calculate the markup, just subtract the price the retailer paid for the product from their selling price. For example, I buy a brush for $5 and sell it in my store for $7, the markup is $2. To calculate the markup as a percentage of selling price, I divide $2 by $7. Markups can be calculated as a percentage of Selling Price, or as a Percentage of cost. Markups can be calculated as a percentage of cost. To calculate the markup as a percentage of the cost, the solution is to divide the Markup by the Cost; in the same way, to calculate markup as a percentage of the selling price, divide the Markup by the Selling Price.
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. A Markdown - a retail price reduction , typically in response to low consumer demand. A markdown is the opposite of a markup. It is usually expressed as a percentage of the selling price, but can also be a percentage of the cost. Multiple Buying influence - several people share in making a purchase decision in an organization's buying center, and most likely occurs during new-task buying. Means several people are involved in the purchase decision making process. It is most likely when the organization is making a new-task purchase, whereas in modified rebuy and straight rebuy situations, the buyer may be the only one involved in making the decision. The different types of people in a buying center are users, buyers, influencers, deciders, and gatekeepers. 5 categories of discounts which sellers give to buyers: 1. Trade Discounts - reduction off the list price given by a producer to a middleman for performing certain functions. Given to intermediaries by a producer as compensation for performing various functions, such as selling, transporting, providing credit services, etc.. 2. Quantity Discounts - deductions from list price that reflect the economies of purchasing in large quantities. Discounts given to customers who make large orders. They usually reflect legitimate reductions in costs, because selling fewer but larger orders reduces per-unit costs for the seller . 3. Cash Discounts - discounts are given to buyers for prompt payment. Based on cash payments or cash paid within a stated time. For example, "2/10 net 30" is a common policy which means that a 2 percent discount will be allowed if the account is paid within 10 days. Otherwise, the entire balance is due within 30 days without a discount, and interest may be charged after 30 days. A common Cash Discount policy is called the "2/10 net 30" policy , which involves giving a two percent discount if cash payment is made within Ten days. 2/10 net 30 means that a 2 percent discount will be allowed if the account is paid within 10 days. Otherwise, the
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