MARKET RESEARCH Country’s trade Restriction
- Reasons for restricting exports is to protect
Market research - crucial part of marketing and
selling
- Determine the scales prospects of a
particular product or group of products and
to devise ways to achieve success
Importance:
1. Gives an accurate view of your business
and your marketplace
2. Determine who and where your customers
are, and which customers are most likely
to to business with you
3. Reveal how customers and prospects view
your existing business, show if you are or
not meeting your customer’s needs.
Market research demonstrates the company’s
need to plan carefully the selling of the product to
its target market
EXPORT MARKET RESEARCH
- Market research abroad is different from a
local market research
- Require specialized information
concerning a particular information
concerning a particular product or industry
in a specific market
How different:
- Culture
- Product’s acceptability in your target
market
How easy
- Provide your company with customized,
useful and practical information
- Researching on your target market is now
easier
- Well-researched export product will have
better chances of penetrating the foreign
market
- Getting the necessary firsthand
information about your target market are
advisable
Elements of Export Market research
1. Marketing Potential
2. Product Requirements
3. Marketing Practices
4. The buyer
the environment
Certification of Origin
- Common documentary requirement in
almost all trading nations
- Certifies that the raw materials used in
making the exported product are obtained
from the country
Market Access
- Tariffs and quotas are just some of the
concerns you should consider in exporting
- Familiarized with other necessary
requirements that the target country may
ask for
- Country’s political climate or situation
should also be considered
Market size, patterns and growth
Competition
Price Structure
- Pricing a strategies to use in the marketing
your product to your target buyers or
consumer
- Only area of the global marketing mix
where policy can be changed quickly
without heavy direct cost implications
- Realize that constant fine-tuning of prices
in overseas markets should be avoided
and that many problem are not best
addressed by pricing action
EXPORT REQUIREMENTS
Product
- product in itself really determines whether
or not it is going to be accepted/bought by
your target market
- creating an acceptable product for the
global market, it is important to examine
what contributes to the “total” product offer
Packing for shipment
- Packaging is done through sea and air
freight
- Distribution systems by which you can
transport or deliver goods such as rail or
road especially in the land locked
countries of europe
- Packed goods can be placed in crates or
containers
- products require more protective
packaging, and processed foods normally
have shelf life or expiration date to
contend with
Consumer Pack
- Others may say that packing is the fifth P
in marketing
[Potential customers are first attracted to
the product’s packaging and at times,
products are bought because of it]
- Caution and care should be observed in
designing packs that might be considered
offensive by a particular foreign country
Do and Don’ts of Designing Packs Worldwide
France, holland, and Sweden
- Green is associated with cosmetics
France
- Red is masculine. To the rest of the world,
blue is masculine
Sweden
- Combination of white and blue the colors
of the national flag is best avoided
[Sweden do not like packaging that shows
gold or blue]
Ireland
- Green and orange should be used with
care
Switzerland
- Blue means for textiles
[Yellow means cosmetics]
China
- Blue and white mean money
[White is the color of mourning, and white
robed figures in illustrations are
counterproductive
Red denoted happiness and profit]
Other Design Elements
France
- Avoid illustrations showing liquor being
poured
Spain
- Bikini-clad girls should appear in
illustrations
Germany
- The word “gifts” means poison
[The use of superlative in packaging copy
is forbidden “Mist” is the word for dung]
Designing Packs Worldwide
Sweden
- The brand name must pronounceable in
swedish
Switzerland
- The oval is an omen of death
Turkey
- A green triangle signifies a free sample
Europe Generally
- Designs resembling the swastika (Nazi
sign or logo ar generally disliked)
Standard Marketing Practices
Transport
- Whatever transport mode is used, you
must be aware of the shipment cost
- you must research how many hours (by
plane) or days (by ship) it would take
before the goods arrive at the country of
destination
[Shipping by air is done when products
such as fashion accessories and
perishable goods are to be delivered]
- Packing requirements should also be
strictly followed for a secure voyage of
your goods
Sales and Distribution Channels
- Find best distribution channels that will link
the producers to their final consumers
- Challenges and opportunities for channel
management have increased because of
technological advancement
[Online marketing and selling, cable TV
shopping, telephone ordering, and catalog
retailing]
Pricing Strategy factors
- Consider your direct or indirect
competitors
Services Expected by Buyers
[After-sales service can be in the form of
extended warranties, guaranteed response
service agreements, installation support,
support for product use and maintenance,
spare parts, field service, and repair]
- Customer loyalty is easier to preserve if
there is strong after-sales service
Advertising and Sales Promotions
- An important part of the communication
mix especially for consumer goods which
have countless small-volume consumers
who can be reached through mass media
[Tips in advertising in Asia]
● Avoid hard-sell approaches (operators are
standing by to receive your orders)
● Human relationships are important (family
theme commercials)
● Asians are collective people who act as a
group (reviews or testimonials of Asians)
- Demonstrations, leaflets, free-trials,
contests, premiums
Sources of information when conducting your
product or market research
1. Department of trade and industry
2. Foreign Instructions
3. Chamber of commerce and industry
4. Government Agencies
5. Industry Associations
6. Foreign Embassies
7. Statistical Reviews
8. Trade Magazines
9. Visits Abroad
10. Friends and relatives abroad
11. Trade Fairs
Marketing Practices
Transport
- Freight rates– speed and frequency
- Reliability– risks
- Packing requirements
Sales and Distribution of Channels
- Normal channels for the product
- Alternative channels
- Advantages, disadvantages, and feasibility
of using normal or alternative channels
- Delivery time requirements
- Mark-ups and discounts of each level
- Major distributors
Pricing strategy Factors
- Practical limits– likely reactions of
competitors
- Supply of competing products
- Prices of competing products– product
advantages
Services expected by buyers
- Technical advice– replacement of
defective merchandise
- Guarantees
- Repairs and Maintenance– spare parts
Advertising and sales promotion
- Media and techniques mainly used
- Timing and geographic concentration
- Sales messages emphasized in
advertisement
PRODUCT DEVELOPMENT
FOR EXPORT
The Product
- A product is the item offered for sale.
- A product can be a service or an item. It
can be physical or in virtual or cyber form.
Every product is made at a cost and each
is sold at a price.
Core product
- The main benefit that a buyer gets from
purchasing the product
- Thus, the main benefit answers the
question
- “What is the buyer really buying?”
- In designing a product, it is important to
know the core benefit that the consumer is
looking for
Actual Product
- Refers to the product’s brand name,
quality level, packaging,design, and
features.
- Actual Product is the physical or tangible
product which a consumer buys to get the
COREbenefits that this product has in
offering.
Brand Name
- Profit can be gained from branding
- If a consumer is impressed by a product, it
will be easier for him/her to purchase it
because of a simple name he/she can
readily associate the product with.
Quality level,
- Efforts should always be made to give the
customer the best quality at any given
price.
- Product quality is important because it
affects the success of the company and
helps establish its reputation in customer
markets.
Packaging
- Plays two important roles– to protect the
product and to promote the product
- Packaging is very vital in establishing
perceived quality
- It is crucial in building the image of the
product
Design and features
- The product must be developed or
improved continuously to suit the
customers’ needs
- Its design and features must be used to
create a competitive advantage
Augmented Product
- The additional consumer services and
benefits
- Post sales services, warranties, repair
services, and a toll-free number
A product successful in one market has to adapt
to conditions in another market for the following
reasons:
1. Difference in physical environment
2. Difference in the purpose the product is
intended for
3. Difference in local tastes
4. Difference in social values
5. Difference in the said market’s capacity to
pay
Product and Company Image
Company Image
- It is the consumer's interpretation of your
company and its products and services.
- It refers to the image that is generated in
the mind of a user when he hears or sees
something about it. Therefore, it refers to
the perception of consumers with respect
to a product, service and / or company.
Developing the product and company image can
be very costly but there are some inexpensive, yet
useful steps that can be undertaken:
1. Deal only with reputable sales agents or
importers/wholesalers.
2. Give importers your best possible service
3. Supply helpful, well-written sales literature.
Product Life Cycle
- A sequence of stages in the life of a
product brought about by changes in
marketing situations that impact both the
marketing strategies and the marketing
mix.
- The term product life cycle refers to the
length of time a product is introduced to
consumers into the market until it's
removed from the shelves. The life cycle of
a product is broken into four stages:
introduction, growth, maturity and decline.
Shown below is the life cycle of a product in the
garments industry as detailed in seven stages
1. Creation
2. Acceptance by fashion trendsetters
3. Adoption by manufacturers
4. High-fashion distribution
5. Mass acceptance, production, and
distribution
6. Popularity decline
7. Abandonment
Product Line Alternatives
1. Straight Extension
Attempts to sell the product using local promotion
strategy in a foreign country
Taking the company's current products and selling
them in other countries without making changes to
the product.
2. Communication adaptation
The product remains basically the same but its
form of promotion differs
Communication adaptation means changing the
communication for a product due to change in
strategy, line extension etc.
3. Product adaptation
Process of modifying an existing product so it is
suitable for different customers or markets.
Modifying a product to make local conditions or
preferences without changing the promotion
strategy.
Adaptation strategy is particularly important for
companies that export their products because it
ensures that the product meets local cultural and
regulatory requirements.
4. Dual Adaptation
Both the product and the promotion have to be
changed to adapt to local situations
5. Product Invention
Creation of an entirely new product which will
serve the unmet need or demand in the market
The need for product development
“Market is constantly changing”
Common assumption or misconceptions of
manufacturers
1. Product development is a sure solution to
business problems
2. It is identical to developing new designs
3. It is the sole responsibility of the designer
4. It is a purely creative activity
With these unqualified notions in mind, there is a
need to rationalize the product development
process as follows:
Product development as a business tool
It can help
1. Develop current products for existing
markets
2. Develop new products for existing markets
3. Develop new products for new markets
Product development as a group effort
- Product development cannot be done by a
single person It involves the organization
of a strong staff, from the operational team
in factories to sales representatives in the
market
Product Development as a process
- It requires close coordination of individual
activities
- In a nutshell, it is a process of developing
new products, and/or updating or
abandoning existing products to meet
changing market requirements or
production capacity.
Sustainable product development program
Corporate Social Responsibility (CSR) is focused
on contributing to social, economic and
environmental responsibilities of businesses to
build a sustainable growth of business.
An enterprise is most likely to succeed in their
venture if it has an allotted program and plans for
a sustainable product development.
Why is the Sustainable Development program a
growing concern?
- A company or business wouldn't only be
concerned about profits, earnings, and revenues.
- As the needs and demands for products
increase, the concern for the environment must
also heighten.
- Minimize environmental effects
- Prevent waste and damage to natural resources
as we continuously try to meet our demands and
needs for change and innovation.
Product Development in the philippines
Helpful ways to consider on what to export:
1. know what your interests’ are
2. Look for products that are readily
available
3. Innovate and modify the resources
you have found to suit your interest
and target market.
Product Development and design center of the
Philippines
Design Center of the Philippines (DCP)
- Is an agency under the Department of
Trade and Industry (DTI)
- It aims to promote product development as
a tool for improving the quality and
competitiveness of Philippine products.
PDDCP Services
1. Product design - design of a new
product, product adaptation,
diversification, or expansion of products or
product line based on market needs and
available technology.
2. Package design - new design or redesign
of packages of food and non-food products
based on requirements of the target
market.
 3. Product technology demonstration - pack which costs more than the actual
hands-on learning and application of skills product’s price
such as finishing techniques related to There are several types of export packaging
product development. - Fibreboard box carton
4. Design and technical information - - Wooden packing
seminars on product development and - Wooden crates
trends, and information on generic product - Wire bound boxes
and package design details and processes - Pallets
related to product development. Corrugated Fiberboard
5. Library - the PDDCP library holds over
1000 book and magazine titles on design
and related topics.

EXPORT PACKAGING, MARKING Export Marking

AND LABELING - Export shipping mark is the principal
Export Packaging - Refers to the proper way of identification for the international
protecting the goods for a secured and safe travel movement of goods
to the country of destination. - Simple, not at all elaborate so as not to
confuse the handlers
The goods must arrive at the buyer’s location in - Correct and complete export markings of
apparent good order and condition, having boxes to prevent faulty handling, accidents
withstood natural calamities, handling stress, etc.
attempted pilferage, and the like.
Complete markings comprise of the ff parts:
According to the Philippine trade trading center’s
handbook on the basics of reporting, the following
have to be considered in packaging:
1. Nature of the Product - more fragile the
product is, the more protective the packing
and packaging should be.
2. Mode of transportation - sea transport has
a longer haul than air shipment, the
packing should be more secured.
3. Climatic conditions during journey -
consider weather for the safety of cargoes
4. Pilferage susceptibility - ensured that the
products are not easily stole
5. Consumers’ requirements - if you have
agreed prior to the shipment that you will
Shipping Mark
provide for what is required, then you have
- Name and address of exporter
to abide by that agreement.
- Name and address of customer
6. Cost of packaging materials against total
- Case/crate/package number
export cost - want to have the best packing
- Purchase order number
for your product. However, the pitfall is that
- Place and port of destination
you might end up with a beautifully secure
Information Mark
 - Country of origin
[This must be stated in accordance with the
provisions of the particular country]
- Weight of the box
- Dimensions of the box
Handling Instruction
- Should be in the language of the buyer if
possible
[aims to convey information if the goods are
sensitive to heat or moisture at risk of breakage
and where the loading tackle]

International Marking systems for pallets and

packages
- Boxes, wooden cases, and crates are
often marked with handling instructions in
the language of the country of origin.
- Graphical symbols offer the only possibility
of conveying the consignee’s intention,
thus, their adoption will undoubtedly
reduce loss and damage caused by
incorrect handling
- They should be stenciled in black directly
on the surface
- The use of red or orange should be
avoided since these colors are used in the
labeling of dangerous goods

Export label
International Marketing Symbols
After the brand name, the labeling is the most
obvious information on the product
Rules in export labeling are as follows:
1. Labels should clearly indicate the quantity
and quality of the goods. The information
should include the following:
a. Name and address of exporter
b. Weight or volume of contents
c. Ingredients (for foodstuff, beverages,
liquor, etc.)
d. Material contents
e. Specific instructions
2. Information must be given in the language
and measurement system of the importing
country
3. The importing country’s regulations
concerning the marking and labeling,
especially of dangerous substances such
as explosives, must be checked and
observed
Informational labeling
- Aims to help consumers make proper
product selection
- Provides information such as durability,
color, features, cleanability, care
instructions and construction standards
Persuasive Labeling
- Promotional theme or logo. It may contain
word such as “super”, “improved”, or “new”
EXPORT DISTRIBUTION CHANNELS
Distribution
- Activities concerned with the transfer of
goods from the manufacturers to the
consumers. Ensure the availability of
products to people who want these items
whenever and wherever they want to
acquire them.
Commercial Distribution
- Trade contracts and the choice of
wholesale and retail channels that involve
finding a good market and demand
stimulation.
> This is often referred to as the marketing
channel of distribution, or simply, the marketing
and trade channels
> This export distribution set-up appears
complicated when compared with the commercial
distribution system in the domestic market
because the former involves a variety of
middlemen and intermediaries before the goods
reach the end-consumer.
Physical Distribution
- Deals with the problem of space and time,
specifically how to affect the transport and
storage of goods. It answers the
question:“how should orders be handled?”
Indirect - [Exporter - producer in home country >
Export merchant or agent > Importer/wholesaler >
Retailer]
Direct - [Exporter - producer in home country >
Retailer/ buying office]
Direct Exporter Sales
- Developing a firm’s own sales force, and
offering products directly to the retailers
without resorting to intermediaries.
Through this method, you may gain a lot of
firsthand experience in exporting and get
the highest return on profit
- The only disadvantage of this method is
the high risk and cost involve
Indirect exporter sales through intermediaries
 - Means relying on imports and commission
agents both here and abroad who, in turn,
distribute or serve major buyers directly.
- Indirect exporting refers to the transfer of
the selling responsibility to other
organizations by the manufacturer.
- In indirect exporting, the manufacturer
utilizes the services of various types of
independent marketing middlemen.
- This type demands a lot of flexibility on the
part of the exporter and is considered low
cost and low risk. However, it provides
very little or insignificant experience in the
market as well as low returns
- Importer-wholesaler
Trade channels and common distribution function
Department Stores
- Large number of styles but low volume
- Moderate to reasonable prices
- Do not provide specific design direction,
but rely on manufacturers for actual design
Discount Stores
- Few styles/high volume
- Low price
- Provide design of a successful product to
be copied
- Shorter lead time compared with that given
by department stores
Specialty Stores
- Few styles/low volume
- High price per style
- Provide design
- Shorter lead time
Mall - Order Companies
- Many styles/low volume
- Moderate to high prices
- Frequent reorders
- Develop their own design
- Designs run for about two years
- Average lead time
Distribution Channel
Producer-Exporter
- Manufactures the goods
- Sells and promotes the good
- Packs the goods
- Weighs and inspects the goods
- Arranges for the transportation
- Delivers the goods to agreed destination
- Receives payment for the goods
Agent
- Does not keep stock.
- Is not responsible for the payment.
- Works on the basis of a sole agency.
- Puts the buyer and seller together.
- Receives commission.
- Buys at his/her own risk.
- Keeps stock.
- Will not disclose the names of his/her
clients.
- Might handle other competing products.
Might be willing to pay some promotional
expenses.
- Sets his/her own profit margin.
- May work on the basis of exclusivity.
- Give credit.
- Delivers goods to retailers.
Special Wholesaler
- May work regionally.
- Does not cover the whole country.
- Often specializes in food and household
products for specific industries like hotels,
restaurants, etc. Does not always insist on
an exclusive contract.
Consumer
- Ultimately buys and processes the
- goods.
- May store the goods.
- Consume the goods.
- Pays in cash or credit.
- Includes industries, hotels, airlines, etc.
Shipping the goods
 - Several choices in transporting the goods
are available: by sea, by rail, or by air
- Ocean freight is the most widely-used form
of shipment in international trade, being
the cheapest mode of transportation for
delivering large quantities of goods over
long distances
Types of Organization of Ocean Transport
● Conference line vessels
- These ships belong to a line which is a
member of a shipping conference
● Conferences are groups of shipping lines
bound together for the purpose of adopting
common rules and regulations They charge
uniform freight rates for particular routes
● Non-conference vessels
- These ships are operated by shipping
companies that offer scheduled services
but quote freight rates independently from
one another
● Tramps ships
- ships do not follow regular routes but
travelwhere cargoes are available
● Charter Ships
- These ships can be hired to transport
products fora particular purpose or time
- The most commonly-used type of shipping
is via the conference line vessels
Ocean Freight Rates
- Mostly depend on the nature of goods
shipped, the weight or volume of the
goods, and the destination
To some extent, they depend on the type of
shipping vessel used
Main component of freight cost
- Basic rate per cubic meter or metric ton
Surcharges such as currency adjustment
factor, bunker adjustment factor, container
service charge, port congestion surcharge,
war risks, arbitrary charge, etc.
Sea Freight Rates Per KG
With the exception of particularly heavy goods,
most LCL is priced per volume of goods, and not
by weight. For most products, use these rules of
thumb for which selecting the most cost-effective
mode:
- Shipments weighing more than 500 kg
become uneconomic to go by air freight.
- Ocean freight is around $2-$4/kg, and a
China-US shipment will take around 30-40
days or more.
- At about $5-8 per kilo, a China-US
shipment between 150 kg and 500 kg can
economically go air freight and will take
around 8-10 days.
- Express air freight is a few days quicker,
but more expensive.
- Packages that are lighter than 150 kg can
economically go by courier (express
freight).
Freight Container
- Is an article of transport equipment which
is single, rigid, non-disposable cargo box,
ventilated, insulated, reefer, flat rock,
vehicle rack, or open top with or without
bogies and attached not less than twenty
(20) feet in length, and having a closure or
permanently hinged door that allows ready
access to the cargo
- Containers have partitions, fitting, and
fastenings able to withstand without
permanent distortion all the stresses that
may be applied in normal service of
continuous transportation
Types of container:
FCL (Full container load)
- Implies that the shipper will have a
container at his/her disposal and that
he/she will normally have enough cargo
with which to fill the container
LCL (Less container load)
- This implies goods in any quantity
intended for carriage in a container, but
the goods are delivered to the carrier for
containerization.

Air Transport
- A good choice for goods which are highly
perishable and valuable
- These goods have a high ratio of price to
weight, which means they are light but
expensive
Advantages of air transport
1. Speedy delivery
2. Less risk of pilferage and damage
3. Less need for costly productive packaging
Air transportation freight
- Based on the actual weight in kilograms or
volumetric weight (dimensions) in
kilograms whichever is higher is the
chargeable weight.
- Typically handled by one company (like
DHL, UPS or FedEx) that manages the
entire shipment lifecycle. Express air
freight shipments are usually smaller (less
than one cubic meter and 200 kilograms)
than air freight
EXPORT PRICING AND
SIGNIFICANCE OF COSTING
Pricing
Price - a monetary figure for which he/she sells
his/her product to his/her customers
- Cost of elements of the marketing mixed
and it generates revenue for the firm
- Customers willing to pay and not what the
business person is willing to change
Basic Concept: Profit Maximization for the firm,
Satisfaction for the customers
Factors affecting price
- Internal (company) : controllable
Cost
Volume
Company Objectives
Profit Margins
- External (environmental) : Uncontrollable
Market Demand
Competition
Others (exchange rate, economy etc.)
Significance of Pricing
- If your price is too high, your buyers get
turned off, and thus, seek other exporters
- If your price is too low, exporters may grab
your offer and you end up working hard for
nothing
Cost
- Most companies make cost the dominant
factor.
- Management wants to charge a price that
will at least, cover the total cost of
manufacturing the product
Roles:
Set basis of the price
Sets the floor or the premium possible price
Cost refers not just to production cost but also to
selling and distribution costs, as well as marketing
support cost earmarked for sales promotion,
advertising
Demand
- Refers to the customer’s reaction to your
product and price
Important factor to consider because it will help
you set the ceiling or the maximum price of your
product.
Competition
- strength and the behavior of competition,
particularly the price and quality offered by
competitors, are key factors that must be
taken into account when setting the export
price
It can be domestic- other local exporters
It can be foreign- exporters from other countries
Channel Distribution
- Pertains to how your product will reach the
target consumer
Company Objectives in pricing
Short term
- Meet competition
- Recover cash rapidly
- Uses excess production capacity
- Penetrate the market
Long-term
- Increase market share
- Ensure return on investment
- Keep competition out of the market
- Project high-quality image for the product
- Stabilize both price and profit margins
Other Factors: Inflations, boom, recession,
interest rate, and exchange rate.
Pricing Policies
- company’s approach to determine the
price at which it offers a goods or service
to the market.
- According to the International Trade
Center’s Handbook on Pricing and quoting
(2002), two main pricing policies are open
to a firm. These are cost-oriented pricing
and market-oriented pricing.
Cost-oriented pricing - This is a simple
approach to pricing
- To given the cost, you simply add a
percentage in absolute margin or
rate of profit to determine the
selling price.
Weakness: the demand side of the
equation is not taken into account
Thus, price may be higher or lower that
what the market can truly afford
Market-oriented pricing - It treats the
export price of the product in the context of
the market and the demand for the item.
- Demand- oriented- companies
relate the intensity of demand to
price.
A higher price is charged when the
customer's interest is high, and a low price
is charged when the interest is low.
- Market- oriented- this method
takes in consideration the actual
and anticipated behavior of
competition.
Pricing Procedures
Steps in Price Setting
1. Establish pricing objectives
2. Analyze market situation
3. Analyze structure
4. Select pricing method
5. Establish target price structure and
specific price quotes
Cost - Amount of expenditures incurred on or
attributable to a specific thing or activity.
Elements of Product Cost
Direct Material
- Are those materials that can be directly
traced to the manufacturing of the product.
Examples: metals to make cars, plastics to make
toys, flour & eggs to make bread.
Direct labor
- The wages, benefits, and insurance that
are paid to employees directly involved in
manufacturing and producing the goods.
Examples: payment received by workers such as
machine operators, sewers, and other who works
on goods by hands or tools
Production overhead
- All costs incurred in the manufacturing
process other than direct materials and
direct labor.
Examples: indirect materials, indirect labors,
indirect expenses
Combining all these will give the total
manufacturing cost of the product
Prime cost= direct material + direct labor
Production Overhead = Indirect labor + Indirect
materials + Indirect expenses
Total Manufacturing Cost= Prime cost +
Productions Overhead
Overhead - Further divided into: Sales and
administrative overhead, Financial overhead, and
marketing overhead.
Combining all these cost elements will give you
the total cost of the product as follows:
Total cost of product= total manufacturing + sales
and administrative overhead
Financial overhead
Marketing overhead
Fixed cost - ends to be relatively by an increase or
a decrease in production
It is normally incurred through the passage of
time, and for that reason, it is also termed “period
cost” Office rent, depreciation of building, salary of
factory manager.
Variable cost - ends to vary directly with changes
in production in volume
- raw materials. Direct labor
Semi-variable cost contains both fixed cost and
variable cost elements
- electricity
Cost-plus Pricing - It is the additional mark-up
pricing to the cost/expenses of the goods and
services to make the selling price. It is indicated in
the name of the method, you add the cost of
materials/labors and mark-up percentage you
want.
Advantage:
1.Cost plus pricing doesn’t need more of
resources
2. It provides full coverage of cost and
constant returns
3. It retains fair competition among
businesses without taking advantage of
consumers.
Unit Cost = variable cost + fixed cost/ expected
unit sales
MUP = Unit Cost/1-desired return on sales
Breakeven point pricing - knowing the price that
the business will earn no profit on the revenue, it
is important to know in what volume the business
would start making profit. Reached when the
income line (sales) crosses the total cost line, so
that income and total costs are equal and neither
a profit or loss is made.
Breakeven Volume = fixed cost/ Price-variable
cost
ARRASTRE- a person/entity who/which performs
portside cargo handling operations, e.g.,
receiving, handling, custody, security and delivery
of cargo passing over piers, quays or wharves,
transit sheds/warehouses and open storages
within the jurisdictional area of responsibility of the
authorized contractor/operator.
WHARFAGE CHARGE- is the amount assessed
against the cargo of a vessel engaged in the
foreign trade, based on the quantity, weight or
measure received and/or discharged by such
vessel. The owner, consignee, or agent of either,
of the merchandise is the person liable for such
charge.