Day 9
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Review
What was the name of the boy from yesterday?
What country is he from?
Complete this word ( C O S _ S )
How does a business pay for its costs?
A business can’t survive if it sells a product or service yet loses money during this process because it cannot pay for its costs.
How does a business pay for its costs?
A business pays for its costs by setting the right price to buy the product or service.
What is price?
Price is the amount of money a customer must pay for a product or service. Every business sets its own prices.
– The price for a sandwich is $5.00.
– The price of a video game is $60.00.
– The price for a car might be $27,000.00.
– The price for a house might be $1,000,000.
A business must make sure that the price is higher than the cost per product or service. Otherwise, the business will lose money and have to close down.
For example, if it costs you $5.00 to make 5 cups of lemonade at your lemonade stand, you want to make sure that the price of each cup is at least $1.00.
Pricing Strategies
There are many different pricing strategies that a business can use to encourage customers to buy its products or services.
- Packages / Bundles
– Sometimes when you purchase a video game console, there are a couple of video games included in the box. - Buy one, get one free (BOGO)
– When you’re at a store, you might see a sign that says “Buy one, get one free” or “Buy one, get one 50% off”. - Prices ending with .99 cents
– Products appear less expensive (e.g. $19.99). - Yearly Price ($10 a month)
– Lead with the monthly price but require a customer to pay for a full year (e.g. $10 a month / $120 year).
Response
How does a business pay for its costs?
What are some different pricing strategies?
Build Instructions
On the next slide, you will be listing the price and pricing strategies of your product or service.
For example, Dwight would write down the information below for his pricing strategy.
Price:
- $200.00 for 2 / 1 hr mentoring sessions a month.
- $350.00 for 4 / 1 hr mentoring sessions a month
- $400.00 for 6 / 1 hr mentoring sessions a month.
Pricing Strategy:
- Receive $100.00 if you refer a friend and they sign up.
Costs:
- 13 inch MacBook Pro – $1,299.00
- iPhone 14 Pro – $999.00
- T-Mobile Magenta Plan – $70.00/month
- Nissan Leaf Lease – $425.00/month
- Car Insurance – $99.00/month
- Electric Charging – $40.00/month
- Office Supplies (ex. notebook) – $15.00/month
- Business Cards – $9.99
- Social Media Advertising – $100.00/month
Marketing:
- Direct messaging and paid advertisements on social media platforms.
- Attend Meetup entrepreneurship events and hand out business cards.
Target Market:
- Age: Young Adults, Adults
- Location: Orange County, California
- Interests: Entrepreneurship; Technology; Innovation; Stock Market
- Lifestyle: Ambitious individuals who have a busy schedule which revolves around activities/tasks for their business. They take limited vacation time and frequently attend networking events.
Industry: Mentorship
Product / Service: Service
Values: In-Person, Flexibility
Description: My business idea is to provide mentoring to startups.
Please have your child write down all their answers on paper.
The purpose of this builder is to be a guide to their idea.
Business Builder
What is the price of your product or service?
___________________________
What is your pricing strategy?
___________________________
Pitch Instructions
Present your price to the class.
Write down questions to ask your classmates.
Remember to be respectful during each pitch.
Setting a low price could devalue your product in the eyes of customers. (True or False)
True
You don’t want to set your price below your cost per product or service because you will lose money. (True or False)
True
Day 9 Homework
(Complete your homework assignment on paper)
What are the prices of your five favorite products or services?
In a few sentences, explain how the pricing strategies of your favorite businesses influence whether or not you buy the products or services.