Business Price Determination Strategies
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Business Price Determination Strategies
Year 11 NCEA Commerce Understanding How Businesses Set Prices 60 minutes
WALT (We Are Learning To)
Understand the concept of price determination in business Define price determination accurately Identify why price determination is important for businesses Illustrate examples using real-life business cases Reflect on factors that influence pricing decisions
Hook Question
Why do you think prices are different for similar products? Think about coffee prices at different cafes Consider supermarket vs convenience store prices What makes businesses charge different amounts?
What is Price Determination?
Price determination is the process businesses use to set prices for their products or services It involves analyzing costs, competition, and customer demand Businesses must balance profitability with market competitiveness Price affects both revenue and customer perception It's a crucial business decision that impacts success
Factors Influencing Price Determination
Group Activity: Factor Identification
Form groups of 4-5 students Brainstorm factors that influence business pricing Use the graphic organizer provided Think of New Zealand business examples Prepare to share your top 3 factors with the class
New Zealand Case Study: Fonterra Dairy Pricing
Fonterra is New Zealand's largest dairy company Must consider global milk prices and demand Production costs include farming, processing, and transport Competition from other dairy companies worldwide Weather conditions affect supply and pricing Government regulations impact export pricing
Key Takeaway
Price determination is a strategic business decision that balances costs, competition, and customer value to ensure both profitability and market success.