The reason for this is that when other operating figures such as wages, advertising expenses, and profits are expressed as a percentage, all are being based on retail price rather than cost of the merchandise being sold. In this section, your attention is directed to price as it relates to your potential customers. These questions examine your merchandise, location, promotion, and customer services that will be combined with price in attempting to satisfy customers and make a profit. After some questions, brief commentary is provided. The importance of price depends on the specific product and on the specific individual.
Some shoppers are very price conscious.
Others want convenience and knowledgeable sales personnel. Because of these variations, you need to learn about your customers' desires in relation to different products. Having sales personnel seek feedback from shoppers is a good starting point. In the cost approach, a predetermined amount is added to the cost of the merchandise, whereas the demand approach considers what consumers are willing to pay. The cost of merchandise will be at one end of the price range and the level above which consumers will not buy the product at the other end.