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Chapter 10 Product, Price, and Place
Trade Discount
A trade discount is the amount a vendor reduces the MSRP for
businesses. This is a standard B2B procedure. Manufacturers give
trade discounts to the stores so they can in turn resell the items at the
full MSRP. This takes into account the fact that retailers must mark up
product prices to make a profit.
Prices
After considering pricing factors, pricing objectives, pricing strategies,
and pricing techniques, you are ready to set a price for the product or
service. Review the mission statement and goals for the business to
make sure the price is in line with what the business is trying to do. To
streamline the process, many businesses use web-based pricing software
or other pricing technology. Automating the process using technology
makes it efficient and saves time in monitoring pricing.
Remember that pricing strategies may change as a business grows.
Take into account that most businesses cannot sell every product at
the list price. Some products may be put on sale, some on permanent
clearance, and some donated to a charity.
Global Entrepreneurs
Mark Zuckerberg
In the early 2000s, Mark Zuckerberg was at Harvard
University studying computer science and psychology and
already had the knowledge to create a website. Little did
he know then that in a few years the website he was to
create would be the foundation of the multibillion dollar,
international corporation Facebook. Zuckerberg founded the global social
networking website Facebook with three of his Harvard classmates.
Facebook started on the Harvard campus as a website called
FaceMash. Facebook was launched on February 4, 2004. Initially, it was
only open to Harvard students. In March 2004, Facebook expanded
to other Ivy League schools, including Columbia and Yale, as well as
Stanford and NYU. In October 2005, Facebook went global. It expanded
to the United Kingdom, Puerto Rico, and Mexico first, followed by other
countries. Facebook’s international headquarters is in Dublin, Ireland.
Facebook earns revenue primarily by selling advertisements that are
placed on Facebook pages, but a small percentage of revenue comes
from payments and fees. Over one-third of Facebook’s revenue comes
from international sources, and international revenue has been increasing
every year. Since its launch in 2004, Facebook has become an essential
tool in the world of international advertising.