Английский язык: Аннотирование и реферирование текста

79 success or the failure of a given production capacity highly depends on the establishment of the price. It is beyond any question that the price has to cover the production expenses in order to realize a profit. The most frequent mistake that occurs in the process of establishing the price is calculating the price based on the production expenses only. The consumers are not interested in how much it costs to produce a given item, but in how much it costs. To a great extent it is the con- sumer who sets the price and in order to operate on profit, one has to know and constantly control the production processes and their ex- penses. The process of setting a price for a product or service is com- plex process that depends on a couple of variables: • Production expenses; • Prices of competition; • The equilibrium between supply and demand; • The market behavior of the consumers; • Others. The price of the product depends also on the other factors in the marketing mix – product, place, and promotion. Place Place is the third element of the marketing mix. Place is not only the physical destination, where the consumer can buy the product or the service, but also the various activities that can be initiated by the entrepreneur to make the product more available to customers. This broader definition of "place" includes also distribution channels. For this purpose the planning of distribution policy is already a necessity. It has three separate directions: • Direct selling – retailing; • Selling through distributors – trading agents, wholesalers, and retailers; • Mixed selling as a combination of the above two.