Price is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.

Price

Price is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.

Price is all around us. You pay rent for your apartment, tuition for your education, and a fee to your physician or dentist. The airline, railway, taxi, and bus companies charge you a fare; the local utilities call their price a rate; and the local bank charges you interest for the money you borrow. The price for driving your car on Florida’s Sunshine Parkway is a toll, and the company that insures your car charges you a premium. The guest lecturer charges an honorarium to tell you about a government official who took a bribe to help a shady character steal dues collected by a trade association. Clubs or societies to which you belong may make a special assessment to pay unusual expenses. Your regular lawyer may ask for a retainer to cover her services. The «price» of an executive is a salary, the price of a salesperson may be a commission, and the price of a worker is a wage. Finally, although economists would disagree, many of us feel that income taxes are the price we pay for the privilege of making money.

How are prices set? Historically, prices usually were set by buyers and sellers bargaining with each other. Sellers would ask for a higher price than they expected to get, and buyers would offer less than they expected to pay. Through bargaining, they would arrive at an acceptable price. Individual buyers paid different prices for the same products, depending on their needs and bargaining skills.

Historically, price has been the major factor affecting buyer choice. This is still true in poorer nations, among poorer groups, and with commodity products. However, nonprice factors have become more important in buyer-choice behavior in recent decades.

Price is the only element in the marketing mix that produces revenue; all other elements represent costs. Price is also one of the most flexible elements of the marketing mix. Unlike product features and channel commitments, price can be changed quickly. At the same time, pricing and price competition is the number-one problem facing many marketing executives. Yet, many companies do not handle pricing well. The most common mistakes are: pricing that is too cost oriented; prices that are not revised often enough to reflect market changes; pricing that does not take the rest of the marketing mix into account; and prices that are not varied enough for different products, market segments, and purchase occasions.

I. Key terms:

Price — ціна — the amount of money charged for a product or service.

Bargaining — торгуватися, вести переговори, домовлятися — discussion of prices, terms of trade.

Cost — ціна, вартість — price (to be) paid for a thing. Cost usually relates to services or processes.

Charge — ціна, плата за послуги — is the amount of money asked, usually for a service.

Market segment — сегмент маркетингу — a group of consumers who respond in a similar way to a given set of marketing stimuli.

II. Vocabulary notes:

bribe, n. – хабар, підкуп — thing given, offered or promised to sb. to influence or persuade him to do sth. (often dishonest) for the giver — take/accept bribes;

bribe, v. – пропонувати (давати) хабар; підкупляти — give a bribe (of sth) to sb.; try to persuade sb. to sth. with a bribe;

commission, n. – комісійна винагорода, комісійні — payment to sb. for selling goods which increases with the quantity of goods sold;

dues, n. – податки, мито — charges or fees;

fare, n. – плата за проїзд; вартість проїзду — money charged for a journey by bus, ship, taxi, etc.;

fee, n.

1) гонорар, винагорода, платня, плата;

2) чайові;

3) внесок — admission fee — плата за ліцензію — amount paid for professional advice or service;

honorarium, n. – (pl. honoraria) — гонорар — voluntary payment made for professional services for which a fee is not normally paid or required by law;

income taxes, n. – прибуток, дохід, надходження — tax payable according to the level of one’s income;

premium, n. – премія, винагорода — additional payment;

salary, n. – оклад — (usually monthly) payment to employees doing other than manual or mechanical work;

rent, n. – рента — regular payment made for the use of land, premises, a telephone, machinery, etc.; sum paid in this way;

toll, n. – мито — money paid for the use of a road, bridge, harbour;

tuition, n. – платня за навчання — fee paid for teaching or instruction;

wage, n. – заробітна плата — payment made or received for work or ser-vices;

III. Answer the following questions:

1. What is price?

2. What does «price is all around us» mean?

3. How is price set?

4. How would a seller and a buyer arrive at an acceptable price?

5. What is the only element in the marketing mix that produces re-
venue?

6. Why is price one of the most flexible elements of marketing mix?

7. Why can price be changed quickly?

8. What are the most common mistakes that are not revised often enough for different products, market segments and purchase occasions?

ІV. Memorize the following terms and use them in your own sentences:

actual price	— фактична (дійсна) ціна;
base price	— базисна ціна;
basic price	— основна ціна;
heavy price	— висока ціна;
top price	— найвища (максимальна) ціна;
flexible/sensitive price	— гнучка (еластична) ціна;
established prices	— діючі ціни;
cost price	— ціна виробництва (ціна витрат виробництва);
contract price	— договірна ціна;
uniform prices	— єдині (однакові) ціни;
stipulated price	— ціна, передбачена контрактом або домов­­леністю (згодою);
nominal price	— номінальна ціна;
ask/offer price	— призначати, називати ціну;
retail price	— роздрібна ціна;
market price	— ринкова ціна;
fixed price	— фіксована (тверда) ціна;
sliding/sliding-scale price	— змінні ціни;
trade/whole scale price	— оптова ціна;
monopoly price	— монопольна ціна;
suggested price	— запропонована ціна;
demand price	— ціна попиту;
quoted price	— призначена ціна;
relative price	— відносна ціна;
initial price	— початкова ціна;
advanced price	— підвищена ціна;
variable price	— змінна ціна;
overestimated price	— завищена ціна;
guiding price	— провідна ціна;
c.i.f. (cost, insurance, freight)	— сіф, вартість, страхування, фрахт;
f.o.b. (free on board)	— 1) Am. фоб, франко-борт; 2) Aм. франко-вагон;
f.i. (free in)	— франко;
f.o.r. (free on rail)	— франко-вагон, міста відправлення;
at a price	— за високою ціною;
at popular prices	— за доступними цінами;
at the price of	— за ціною в...;
price per unit	— ціна одиниці товару;
to adjust prices	— коригувати ціни;
to affect prices	— впливати на ціни;
to carry a price	— мати ціну;
to set a price	— установлювати (призначати) ціну;
to spoil prices	— підривати ціни; продавати за явно заниженими цінами;
pricing	— ціноутворення, калькуляція.

V. Match cause with effect to complete the sentences below
(if clauses):

cause	effect
companies raise wage	production costs
company raises its price	increase
production costs increase	it will sell more
demand falls	sales decrease
prices rise	demand falls
sales decrease	production falls

1. If the company raises wages, ______.

2. The more the production costs increase ______.

3. The more demand falls, ______.

4. If prices rise, ______.

5. If sales decrease, ______.

6. If a company raises its price, _____.

VI. Match the price term with the person or organization that charges it:

Price term	Person/organization charging
1) salary	a) visiting lecturer
2) rate	b) insurance company
3) premium	c) white-collar worker
4) fare	d) local council
5) commission	e) social club
6) fee	f) blue-collar worker
7) rent	g) taxi driver
8) dues	h) sales agent
9) retainer	i) private school
10) tuition	j) lawyer
11) wage	k) bridge owner
12) toll	l) bank
13) honorarium	m) architect
14) interest	n) property owner

VII. Translate into English:

1. Перш ніж почати розглядати методики ціноутворення, необхідно усвідомити, що цінова політика продавця залежить від типу ринку.

2. Історично ціна завжди була основним фактором, що визначає вибір покупця.

3. Як установлюють ціни? Історично склалося, що ціни встановлювали покупці і продавці в процесі переговорів один з одним. Продавці зазвичай загадували ціну вищу за ту, що сподівалися одержати, а покупці — нижчу за ту, що розраховували за­платити. Поторгувавшись, вони зрештою зупинялися на взаємо­прийнятній ціні.

4. Установлення єдиної ціни для всіх покупців — ідея порівняно нова.

5. Фірми підходять до проблем ціноутворення по-різному. Дрібні ціни часто встановлюються вищим керівництвом. У великих компаніях проблеми ціноутворення зазвичай розв’язують керівники відділів і керуючі за товарними асортиментами.

6. Перед усіма комерційними і багатьма некомерційними організаціями постає завдання встановлення ціни на свої товари чи послуги. Ціна втілюється в безлічі іпостасей (names).

7. За житло ви вносите квартплату, за навчання — плату за навчання, лікарю ви виплачуєте винагороду.

8. Усі види транспорту: авіалінії, залізниці, таксі, трамваї і тролейбуси, автобуси і метро — вимагають з вас плату за проїзд.

9. Місцеві комунальні служби називають свої розцінки тарифами на комунальні послуги, а місцевий банк стягує за отриману вами позичку відсотки.

10. За проїзд на власному автомобілі ви сплачуєте дорожнє мито.

11. Компанія, що застрахувала ваш автомобіль, стягує з вас страхові внески.

12. Лектору платять гонорар за доповідь про вчинок урядового чиновника, що одержав хабаря за допомогу шахраю, який украв членські внески.

13. Клуби і товариства, членом яких ви є, для покриття непередбачених витрат збирають додаткові кошти.

14. Адвокат може запросити з вас за свої послуги завдаток.

15. «Ціною» будь-якого службовця є його платня, а «ціна» робітника — його заробітна плата.

16. Хоч економісти з цим і не погодяться, але багато хто з нас відчувають, що прибутковий податок — це ціна, яку ми платимо за право робити гроші.

17. Економісти виокремлюють чотири типи ринків, кожний з яких має свої проблеми в галузі ціноутворення.

18. Фірмі необхідно знати ціни і якість товарів своїх кон­ку-
рентів.

19. Незважаючи на підвищення ролі нецінових факторів у процесі сучасного маркетингу, ціна залишається найважливішим показником.

VIII. Translate the following sentences into Ukrainian paying attention to the gerund:

1. The method of quoting prices contributes to uniformity of price throughout the market.

2. The buyer recovers the cost by deducting the actual transportation, or a standard transportation allowance, when he pays the invoice.

3. The ability of buyers to buy, or to refrain from buying, or to exercise choice among alternatives, places a limit on the freedom of sellers to enforce their policy decisions.

4. Without being carried to the ultimate, it constitutes a position of competitive strength where the leading firm is leader in the national market.

5. Working long hours without a break is very tiring.

6. Branding also permits the owner of the brand to bequeath brand preference to other products organized.

7. The author has succeeded in basing his study on sound principles.

8. This book aims at acquainting advanced studies of English, with the language as used by the best masters of contemporary English literature.

9. Without language there is no understanding among people, and without understanding there is no change of their being able to work together.

10. Wise buying often involves not only a forecast of demand but also a forecast of prices.

11. I couldn’t help being flattered when I was praised for my diploma paper.

12. By deciding to brand, a manufacturer has the opportunity to develop improved market position for his product and he gains the freedom to do the promotion himself.

13. The package is the means of identifying the product to the prospect; it carries the trade-mark or brand identification.

14. By having his own brand a distributor hopes to acquire some degree of market control.

15. Sellers try to develop differentiated offers for different customer segments and, in addition to price, freely use branding, advertising, and personal selling to set their offers apart.

16. They will stop buying the product and will complain to others about it.

17. The strategy for setting a product’s price often has to be changed when the product is part of a product mix.

18. There are also many factors to consider in responding to price changes.

19. Apologizing for having stayed so long he asked them to proceed with their investigation.

20. In measuring the price-demand relationship, the market researcher must not allow other factors affecting demand to vary.

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