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Tuesday, December 22, 2009

Something for deliberation (20)






As a businessman, profit margin from the selling price or cost has little meaning. Profit margin must be seen from the context of time that one needs to spend to make that amount. It's not how much one gets to make from the selling price that is important but how much time needs to be spent to earn that amount!
The same reasoning should apply when the same businessman becomes a customer, consumer, when he buys a service or product : Higher price does not necessarily mean it's more expensive and cheaper price does not necessarily mean it's cheaper.
Can customers be made to understand this point? Would they consider this point when the price quoted to them is different i.e higher? What if the difference in price is justified by the inclusion of add value?




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