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Price Planning

　　A price represents the value of a goods or service for both the seller and the buyer. Price planning is systematic decision making by an organization regarding all aspects of pricing.

　　The value of a goods or service can involve both tangible and intangible marketing factors. An example of a tangible marketing factor is the cost savings__1__. An example of an intangible marketing factor is a consumer’s pride in the ownership of a Lamborghini rather than another brand of automobile. For an example to take place, both the buyer and seller must feel that the price of a goods or service provides an equitable value. To the buyer, the payment of a price reduces purchasing power __2__. To the seller, receipt of a price is a source of revenue and an important determinant of sales and profit levels.

　　Many words are substitutes for the term price: admission fee, membership fee, rate, tuition, service charge, donation, rent, salary, interest, retainer, and assessment. No matter what it is called,__3__: monetary and non-monetary charges, discounts, handling and shipping fees, credit charges and other forms of interest, and late-payment penalties.

　　A non-price exchange would be selling a new iron for 10 books of trading stamps or an airline offering tickets as payment for advertising space and time. Monetary and non-monetary exchange may be combined. This is common with automobiles, __4__. This combination allows a reduction in the monetary price.

　　From a broader perspective, price is the mechanism for allocating goods and services among potential purchasers and for ensuring competition among sellers in an open market economy. If there is an excess of demand over supply, prices are usually bid up by consumers. If there is an excess of supply over demand,__5__.

Exercise:

　　A a price contains all the terms of purchase

　　B obtained by the purchase of a new bottling machine by a soda manufacturer

　　C where the consumer gives the seller money plus a trade-in

　　D available for other items

　　E prices are usually reduced by sellers

　　F price means what one pays for what he wants

key:BDACE