Mors 200 Arts Final - Funeral Service Merchandising- Chapters 14-16 Part 2

The return of a portion of a payment.

To give to an agent to be care for or sold. (Pays only when the merchandise is sold).

The firm considers operating costs and profit requirements and then prices merchandise in line with the value it anticipates the consumer will perceive.

Regardless of a casket's wholesale cost, the firm will add a zero to that wholesale cost to determine retail price.

The difference between merchandise cost and selling price. (does not reflect a measure of true profit).

The more a customer spends, the more value he should receive.

"You get what you pay for."

The percentage derived by dividing the wholesale cost of the merchandise by the retail price of the merchandise. Measures the value of each consumer dollar that is spent to purchase a specific product. Wholesale cost / Retail price= CVI

Examines teh relationship between the whoesale cost of the merchandise and the total cost (both service and merchandise) to the consumer. Wholesale cost / (Total of merchandise + services) = MVR

Fixed dollar amount method Fixed multiple method Graduated Recovery method Increasing graduated recovery Decreasing graduated recovery Modified graduated recovery

Examine financial needs (overhead) and profit objectives to determine the amount of profit it wishes to generate on each casket sale; this amount is then added to the wholesale cost of each casket offered by the funeral home. People that must buy low-end merchandise are unfairly penalized and receive little value for each dollar spent. The final retail price can seem awkward

A price determination method whereby the casket cost is multiplied by a constant factor. As one moves up the price ladder, there is no improvement in the Consumer Value Index. No motivation for the customer to buy a higher end model. Prices can be awkward

A pricing method where the markup varies.

Entry-level merchandise receives a relatively low markup while higher-end merchandise receives a comparatively higher markup. Causes the CVI to decrease with each step upward in the product assortment. Customers discouraged from buying higher-end merchandise Rewards those who choose to spend the least Funeral home receives the least possible dollar-amount of profit. Final retail price can be awkward

Applies a markup that is inversely proportional to the wholesale cost of the casket. Upper-range caskets receive markups that are comparatively less than those applied to entry-level caskets. Consumers encouraged to buy up Purchasers of entry-level merchandise receive comparably little value

Essentially the same as the Decreasing Recovery Method with an important exception: The first entry-level offering (and perhaps the second and third units) receives a slightly less aggressive markup. Consumers encouraged to purchase higher

The number of times sales in a given price bracket occur over a fixed period of time.

Another way of describing a method of pricing so that actual price figures are familiar to the consumer; it is widely practiced in nearly every form of retailing, but in funeral service, where the products themselves are very unfamiliar to the consumer, this pricing takes on a special importance. The final digit will almost always be a 5, 7, 9, or 0.

A standard or point or reference to which all other offerings may be compared. Most expensive and least expensive caskets

Implicitly sets the buyer's perceived middle price range. This should always be priced at a figure that is divisible by 2. This price, when divided in half should be slightly above the funeral home's target sales objective.

Where customers are most comfortable spending.

Must possess reasonable aesthetics and quality in order to adequately serve the consumer who cannot afford any better. It cannot be too attractive, or the consumer who CAN afford to invest more will have no reason to do so.

Concerned with providing customers with a selection of prices, with steady and obvious value progression at each rung on the price ladder.

More concerned with the actual number of choices available at each price rung on the verticle merchandising ladder. A variety of choices at any given price level encourage the consumer to buy at that price level. The greatest number of model choices exist at or slightly above the target sales objective.

Important to the financial well-being of any funeral home.