marketing indicator 2.11

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Marketing Indicator 2.11 Process the sale to complete the exchange.

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Marketing Indicator 2.11. Process the sale to complete the exchange. Types of Charges Associated with Purchases. Companies allow the following methods to obtain payment for a sale Cash or check Sales Credit Card Debit Card Layaway On Approval Cash On Delivery - PowerPoint PPT Presentation

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Page 1: Marketing Indicator 2.11

Marketing Indicator 2.11Process the sale to complete the exchange.

Page 2: Marketing Indicator 2.11

Types of Charges Associated with Purchases Companies allow the following methods to obtain

payment for a sale Cash or check Sales Credit Card Debit Card Layaway On Approval Cash On Delivery

Sales Transactions are also affected by: Returns Exchange Allowance Shipping Charges Sales Tax

Page 3: Marketing Indicator 2.11
Page 4: Marketing Indicator 2.11

John Smith

7150 E. 24th StreetYuma, AZ 85365

04/08/11 6 38760

3

2

23 Halters

BeltsPair of Boots

Shirts $29.95

36.95

125.0037.95

$89.95

$73.90

$250.00

$113.85

$527.60

$31.66

$559.26

$527.60 +$31.66$559.26

.066%

$527.60 *.066$31.66

Page 5: Marketing Indicator 2.11

Business to Business Sales

Much of the math done in business-to-business sales is for purchase orders or

invoices

Page 6: Marketing Indicator 2.11

Purchase Orders

To place an order, most companies prepare a purchase order (PO).

It is a legal contract between the buyer and the supplier.

It lists the quantity, price, and description of the products ordered.

It lists the terms of payment and delivery.

Page 7: Marketing Indicator 2.11

Invoices When filling an order based on a PO, a vendor will include an invoice with the delivered merchandise.

In addition to the merchandise total there are also places for sales tax, shipping charges, and the amount to be paid by the customer.

Page 8: Marketing Indicator 2.11

Dating Terms Dating terms state when a bill must be paid and the

discount permitted for paying early.

Ordinary dating occurs when the dating terms are based on the invoice date.

Ex: 2/10, net 30 --- specifies the percent of discount permitted for paying early (2 percent), the number of days the buyer has to take advantage of the discount (10 days), and the number of days within which the invoice must be paid (30 days).

Page 9: Marketing Indicator 2.11

Types of charges and discounts associated with purchases. Purchase Discount – set amount of money that a

business saves on a specific order if the payment is made within a certain period of time.

ExampleA purchaser brought a $100 item, with a purchase discount term 3/10, net 30. If he pays within 10 days, he will only need to pay $97. If not, the amount needs to be fully paid within 30 days.

Bulk Discounts – purchasing a large quantity and getting a discount on the price

Page 10: Marketing Indicator 2.11

Shipping In retail sales transactions, shipping charges are not

subject to tax.

Parcel Post – offered by the U.S. Postal Service

Express Mail services include Federal Express, UPS (United Parcel Service), and DHL Express.

Page 11: Marketing Indicator 2.11

Tax TableSales Tax and Example

Your store ships products worldwide from one fulfillment center.You must collect a 15% sales tax on orders shipped to geographical zone A and a 7% sales tax on orders shipped to geographical zone B. You do not need to collect sales tax for orders shipped to other regions in the world.The following tables summarize the taxes that must be collected:

Sales Tax Rates

Geographical Zone

Tax Rate

A 15%

B 7%

Rest of World 0%

Page 12: Marketing Indicator 2.11

Shipping/Delivery TableShipping Charges and Example

You must also charge shipping for orders shipped to geographical zone A and geographical zone B.

For shipments to addresses in geographical zone A, shipping charges are $15, while shipping charges are $10 for shipments to addresses in geographical zone B. The rest of the world is subject to $25 shipping charges.

Shipping Rates

Geographical Zone

Shipping Rate

A $15

B $10

Rest of World $25

Page 13: Marketing Indicator 2.11

Delivery Delivery terms are part of the selling arrangement

negotiated between the buyer and the seller. F.O.B. = Free On Board F.O.B. destination – The ownership remains with

seller until goods reach their destination. Seller pays costs.

F.O.B. shipping point – The buyer pays shipping costs and is responsible for transit damages.

F.O.B. factory freight prepaid – The goods become the buyer’s property, but the seller pays for shipping.

F.O.B. destination charges reversed – The buyer pays but if goods are lost or damaged in transit, the buyer’s investment is protected.

Page 14: Marketing Indicator 2.11

How do charges and discounts affect the price of purchases?

Can increase the cost of items, overall, to cover credit card charges and frequent discounts

Retailers want to make money, so they pass the charges/loss of revenue because of discount down to the customer

Page 15: Marketing Indicator 2.11

How does technology speed up calculations of charges and discounts? Don’t have to figure “in your head” or by hand

calculations of charges and/or discounts

Cash register/POS (point of sale) terminal/Register does it for you, so you don’t have to make change

Ex: $6.65 sale. You are given a $10 bill. How will you make change?

Lessens the time taken to double check figures.

Page 16: Marketing Indicator 2.11

What is the impact of incorrectly calculating charges/discounts? Drawer/register doesn’t balance

Costs the retailer money

May cost the retailer a customer Ex: Overcharging the customer Ex: Customer loses confidence in store, as the

transaction wasn’t correct

Takes time to redo the sale/void out the previous transaction

Books/accounting don’t reconcile

Page 17: Marketing Indicator 2.11

What is a special order?

The request of an item not normally in stock or carried at

a store

Page 18: Marketing Indicator 2.11

How does accepting special orders affect retailers?

Continue to meet customers’ needs and establish their loyalty

Time consuming to find the item, place, track, and deliver order

May lose money on an item if a price is quoted to a customer before the total cost (price, shipping, tax) is made aware to you---the retailer.

Page 19: Marketing Indicator 2.11

What is the criteria for accepting special orders?

Being able to locate the item and get it in a reasonable amount of time (ie by when the customer needs it)

20% or sometimes 50% deposit required

Will the business make money on it? Or lose money on it?

Page 20: Marketing Indicator 2.11

What paperwork is needed to process special orders?

Ticket—outlining exactly what is ordered (color, size, model)

Deposit money recorded on ticket

Purchase order for vendor

Sales receipt---paid in full

Page 21: Marketing Indicator 2.11

Why obtain specific information when processing special orders?

To insure retailer is ordering exactly what customer wants

If wrong color or size is ordered, customer won’t be happy and may not do business with the retailer anymore.

Vendor may not take incorrectly ordered item back.

Costs money for the retailer to ship back/replace (if can) or to have at store and not sell.

Page 22: Marketing Indicator 2.11

.05 * 64.00 = $3.20 .30 * $163.00 = $48.90