Transcript GB PRESENTATION SLIDES: Price

GLOBAL BUSINESS
WEEK 13
PRICE
1. How important is price to you?
2. When you want to buy something,
which do you do?
a. Make sure you get a good deal?
b. Spend time looking for the lowest
possible price?
c. Not worry about price, just buy what
you want?
Match the words and phrases 1-3 with the
definitions a-c.
a. A general direction in which
something is developing or
changing.
B1.
C2.
A
Set the price
Profit Margin
3. Trends
D4.
Pricing Strategy
b. refers to method companies
use to price their products or
services.
c. The amount by which revenue
from sales exceeds costs in a
business (Net Income/Sales).
d. The process of coming up with
5. Revenue (called
a cost to consumers of a good
Turnover in the UK)
or service produced by a
business
It is difficult for companies to
_________
of a product. A lower
SET
THE PRICE
INCREASE
price may help to _________
sales,
REDUCES
MARGIN
but it also _________
the PROFIT
_________.
As a result, the company may
CUT COSTS
have to _________
to keep prices
GRAPHS
down. We often use ________
TRENDS
to show _________
in prices
over months or years. Studying
trends can help companies to
STRATEGY for
choose the right PRICING
_________
their products.
a. Graphs
b. Pricing
Strategy
c. Set the
Price
d. Trends
e. Cut costs
f. Increase
g. Reduces
h. Profit
Margin
PRICE TRENDS
1. What kinds of products or services are
increasing in price at the moment?
2.
What things are getting cheaper?
Look at the graph and complete each sentence
with a different item from the key.
Spending on ___________ increased up to 1991 and then
fell sharply.
Look at the graph and complete each sentence
with a different item from the key.
1. Spending on ________ increased the most.
Look at the graph and complete each sentence
with a different item from the key.
1. Spending on ________ rose by nearly 20 percent.
Look at the graph and complete each sentence
with a different item from the key.
1. Spending on ________ decreased slightly after 1996.
ARTICLE: MAKE IT CHEAPER AND
CHEAPER
Match the headings 1-4 with the
paragraphs in the article a-d.
1.
D
2.
A 3.
C 4.
B
Big supermarkets are more efficient.
Drinks come cheaper in large cans.
Technology improves food production.
Supermarkets force producers to cut
costs.
ARTICLE: MAKE IT CHEAPER AND CHEAPER
Are the Following Statements True or False?
1.T It costs less to produce large quantities of food than ever before.
2.T Big supermarkets can offer food at lower prices because they can buy
in large quantities.
3.T Some food producers have reduced their range of products.
4.F To meet supermarket demands, Cadbury employs more workers than
before.
5.T
Shoppers will buy larger quantities when there is a special price.
6.T For food companies, larger portions are not much more expensive to
produce.
7.F The writer thinks companies will be happy to reduce the sizes of
portions.
VERBS THAT TAKE AN OBJECT
Verb + Object
1. The company has decided not to raise
salaries this year.
2. The supermarket raised the price of
milk.
Verb – No Object
3. Costs are rising all the time.
4. The price of milk rose last month.
Economic Trends: Choose the correct verb in italics.
Earn less, spend more?
Object: raise / raised
No Object: rising / rose
Growth slows, but consumers still spending
ROSE last year,
Consumer spending in the US rose / raised
UP the
mainly because the oil companies pushed PUSHED
up / rose
price of oil to the highest level for several years. Higher oil
prices meant that spending on petrol for cars, as well as
home heating, INCREASED
raised / increased.
GO UP
However, salaries did not put
up / go up to match the rise
in spending. Many companies cut /CUT
fell jobs at the start of
the year in order to reduce /REDUCE
rocket their costs. These
companies are still not increasing
/ rising their workforce.
INCREASING
Economic growth remains slow and current trends seem set
to continue.
PRICING STRATEGY
Which do you think is the best strategy?
1. Reduce costs by one per cent.
2. Increase the volume of sales by one per
cent.
3. Increase all its prices by one per cent.
LISTENING
Callum Taylor, a marketing
expert, talks about pricing
strategy on a radio
program about business.
How much can a company
expect to increase its profit
using each of the above
strategies? Listen to part
one and complete the table.
Listen to part two and complete the following
sentences.
1.
The cost-plus method of pricing: ‘You calculate what it costs
to _______ an item and then you add the _______ _______ you’d
like to have.’
2.
Another method: ‘Find out what your ________ are ready to
_______ on that product.
3.
A third way: ‘Look at the _______.’
4.
Before setting a price, companies should ask two questions:
Who are the _________ _________?
What kind of _________ or _________ are we _________?
5. You shouldn’t develop a product and then say: ‘OK, now let’s
________ _________ __________ __________.
JCPenney, Inc.
JCPenney, Inc. is a chain of American,
moderately priced department stores
founded in 1902.
Former Apple executive, Ron Johnson,
took over as CEO November, 2011
when JCPenney was struggling
financially.
Johnson drastically changed
JCPenney’s pricing strategy by:
• eliminating coupons and sales; and
• dropping prices (sometimes as much
as 40%!); and
• Rounding merchandise prices up.
BEFORE
AFTER
Consumers are used to promotions, sales,
and discounts in the department store
world, and…
JCPenney’s customers are price-sensitive,
budget-constrained consumers who are
always on the lookout for a better deal.
What effect do you think the new
pricing strategy had on JCPenney?
Effects of JCPenney’s Drastic Pricing
Strategy
• Revenue tumbled almost 23%!
• The stock price plunged by more than
50%!
• Employee Moral within the company
plummeted
HOMEWORK
1. There will be a vocabulary quiz next Friday,
June 7th at 9:35am. This will count as 5% of your
total grade. The quiz will cover vocabulary from the
following units:
• Making Predictions
• Job Seeking
• Price
2. Don’t Forget! Please print out a copy of your
completed presentation (one copy per team) and
turn it in at the beginning of our June 7th class.
Presentations are scheduled for Friday, June 14th.
**The following vocabulary may be on the
quiz. Please study them.
•
Man is constantly exploring new possibilities and making new discoveries. New technology will shape our
future and open up new opportunities for business. But developing a new technology takes time and needs
a huge amount of funding. People who want to finance new ventures need to borrow a lot of capital. But
it may be difficult to persuade people to invest in a project that is very risky or doesn’t have the potential
to make much profit.
Finance for Space Ventures
It is very difficult for companies in the private space industry to find the necessary ___________ for new space projects. Private inves
tors don’t like investing in space because the ___________ is high, and because the ____________ can be as much as 20 years or more.
Investors want to be sure that they will get a good _______________. However, some millionaire space enthusiasts will support projec
ts even if there is not much __________ for making a profit.
Even government projects are often short of money. Most space ventures have to run on ____________.
1.
Apprenticeship
1.
Set the price
2. Internship
2. Profit Margin
3. Work placement
3. Trends
4. Postdoc Program (postdoctoral fellowship)
4.
Pricing Strategy
5.
Revenue (called
Turnover in the UK)
It is difficult for companies to _________ of a product. A lower price may help to _________ sales, but it also _________ the _________. As
a result, the company may have to _________ to keep prices down. We often use ________ to show _________ in prices over
months or years. Studying trends can help companies to choose the right _________
for their products.