Why are Price Quotations Important in Business and a Part of Business Marketing Strategy?
Price Quotations are Important in Business and It is Part of Business Marketing Strategy
- Category :Business Management
It is normal to customers that before they purchase products or services from business firms – first they would request quotations for the prices of particular products and services they needed. Customers are normally looking for good quality and with the lowest prices of products. So, they go from one company to another company to check them out and to compare products prices.
Customers need fast action when they requested the quotations of the prices for the products and services they needed, they wanted them at once. They cannot wait for long – their reasons - there are other companies who also sell the same products and services they needed.
Normally price quotation is granted to customers in a short time. Some business firms produce it in less than an hour. But other companies produce it for a day, in three days or to one week. And there are companies asked charges fees before they produce the price quotation requested by would-be customers.
How to determine price quotation? Price quotation is determined by the quantity: either by the hundred (C), by the thousand (M), by the ton (T), etc. Materials as bricks, adobe, stones, concrete hollow blocks and the like are quoted by the hundred.
Floor tiles and bath tiles may be quoted either by the hundred or by the thousand but normally they are quoted by the thousand.
To find the cost of goods priced by the hundred or thousand – divide the quantity by 100 or 1000 as the case may be to determine the number of hundreds or thousands. The result is then multiplied by the unit price.
Below are illustrative examples:
Find the cost of 3,480 adobe stones at $34.50 per C.
Solution: 3,480/100 = 34.8 number of hundreds
And then multiply $34.50 x 34.8 = $435 is the total cost.
What will 15,800 floor tiles cost at $750 per M?
Solution: 15,800/1000 = 15.8 number of thousands
And then multiply $750 x 15.8 = $1,185 is the total cost
Now to find the cost of goods priced by the ton (T) divide the number of pounds in the quantity figure by 2,000, which is the number of pounds in one ton. The resulting quotient is then multiplied by the price per ton.
Example: Find the cost of 3,870 lbs. of scrap iron @ $2,500 per ton.
Solution: 3,870/2000 = 1.935 number of tons
And then multiply $2,500 x 1.935 = $4,837.50 is the total cost
Price quotation can help boost business. It is a kind of business marketing and strategy. Business owners hired accountants or other people who are capable to do the job or they assigned the job to some of their best employees who are familiar with their products and services. And business owners should also be familiar with the unit equivalents of other quantities and such quantities as dozen, gross, ream, gallon, kilogram, yard, meter, acre, hectare, etc.
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