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Strategies & Market Trends : Tang's school of business management for serious investors -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (18)	8/2/2001 7:46:36 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 57

A lesson in pricing for profit? A business is born if the demand or needs exist. A product or service has to be priced within the affordability of per capita income. Then it is location, location, and location to reach the right customers. The price of a product or service is divided into the life style of a customer. Whatever is left in the customers' pocket(disposable income) after rent, automobile expenses, and food; each takes a quarter of the customers' income. If the price is cheap enough the volume of sales will go up. If the price is too expensive, the volume of sales goes down. The properly prices item will have the maximum volume for the greatest profit. However, the cost of advertising sometimes becomes 80% of the price, to achieve the largest volume of sales. Cigarettes and soft drinks have that kind of price, cost and profit structure. Many business has management that did not understand pricing and profits; and tries to run deficit spending to build a business. Avoid them like a plague if you are wise in investment principles.