Packet- Purchasing and Funeral Pricing

Question 1

To obtain by paying money or its equivalent to buy for a price.

Answer 1

Purchasing

Question 2

Will help to maintain a balanced line in the selection room. It is having a strategy for the product before buying it.

Answer 2

Planned Buying

Question 3

Beware of bargains, sales and conventions.

Answer 3

Do not Over Buy

Question 4

Be careful not to do this financially.

Answer 4

Over Extend Yourself

Question 5

Should be assigned to purchasing, however, different people can be assigned to purchase different items.

Answer 5

Only one Person in Each Funeral Home

Question 6

• Pick only reputable manufacturers
• Pick suppliers who give prompt delivery
• Avoid the manufacturer that has floating prices. The supplier will usually take the difference out on you.
• Avoid the supplier that sells inferior or damaged merchandise.
• Pick a supplier that backs up and services the product.
• Avoid the gossip.
• Buy local if possible.
• Avoid all high pressure sales persons
• Never let a sales person in the selection room.

Answer 6

Relationship of Funeral Directors to Their Suppliers

Question 7

One who gives special prices to special funeral directors.

Answer 7

Floating Prices

Question 8

If the supplier talks about your competitor, he is also talking about you.

Answer 8

Avoid the Gossip

Question 9

• Never let them see what you are buying
• Never let them see who you are buying from
• Never let them see your retail prices

Answer 9

Never Let a Sales Person into the Selection Room

Question 10

• Cash Discount for prompt payment
• Quantity discount
• Rebate
• Consignment

Answer 10

Payment Terms

Question 11

To give to an agent (funeral director) to be care for or sold. No payment to casket supplier until the item is sold.

Answer 11

Consignment

Question 12

Requires funeral directors to use an itemized pricing system.

• Does not forbid offering special packages that may use the unit, bi-unit, or functional pricing systems as long as the family receives the general price list that has everything itemized on it.

Answer 12

FTC

Question 13

The method of price quotation by which each unit of service and/or merchandise is priced seprately.

Answer 13

Itemization

Question 14

A method of price quotation in which one price includes both service and casket.

Answer 14

Unit Pricing

Question 15

Developed between 1925 and 1937 to overcome multi unit pricing (full itemization). The great depression was most significant in the development of the packaged funeral.

Answer 15

History of Unit Pricing

Question 16

• Eliminates arbitrary division between services and merchandise.
• Shows families total cost without bothersome details- bottom line philosophy.
• Simplifies accounting and billing.
• Simplifies explaination and is easily presented.

Answer 16

Advantages of Unit Pricing

Question 17

• Exaggerates the importance of the casket and minimizes the importance of service.
• Economically depressed consumers are usually subsidized by the more expensive packages.
• Consumer is unable to make a free selection of components.
• Total price is the only basis of comparison with competition.
• Fails to educate consumes on the true value of merchandise and service on the retail level.

Answer 17

Disadvantages of Unit Pricing

Question 18

A method of price quotation showing seprately the price of the service to be rendered and the price of the cakset.

Answer 18

Bi-Unit Pricing

Question 19

The funeral directors that had no selection room were forced into this system out of necessity. Also extensively used in the 1960’s as funeral directors wanted to be seen as professionals, thus a professional service charge began to appear on funeral bills.

Answer 19

History of Bi-Unit Pricing

Question 20

• Emphasis on service rendered as well as merchandise sold.
• Consumer recognizes the value of service. The funeral is more than the casket.
• Permits equal charge for equal service.
• Facilitates comparison betwen cakets and other commodities.

Answer 20

Advantages of Bi-Unit Pricing

Question 21

• Division between service and merchandise is still arbitrary- question remains where the put overhead, where to put profit.
• May in effect create confusion for the consumer.
• Still not enough to give the consumer a free selection of components.

Answer 21

Disadvantages of Bi-Unit Pricing

Question 22

Each and every function, unit of service and item of merchandise is priced seprately. It is sometimes referred to as the historical pricing method.

Answer 22

Full Itemization

Question 23

• Professional services
• Use of facilities
• Automotive equipment
• Merchandise

Answer 23

Common Units in Full Itemization

Question 24

• Funeral directing
• Support staff, paperwork
• Embalming
• Other preparation of the body

Answer 24

Professional Services

Question 25

* Funeral/memorial service at the funeral home * Visitation/viewing

Answer 25

Use of Facilities

Question 26

* Removal * Hearse * Flower car * Family car (limo) * Clergy car

Answer 26

Automotive Equipment

Question 27

* Casket * Outer burial container * Clothing * Marker * Printed materials

Answer 27

Merchandise

Question 28

* Clear understanding of the charge- criticism free by consumer groups. * Services and merchandise are more thoroughly discussed, consumer is made to realize all the components of a funeral.

Answer 28

Advantages of Full Itemization

Question 29

* Often difficult to explain to family only interested in the bottom line. * Complex billing and accounting * Rates difficult to establish because time involved and duties not standardized. * Items omitted might be regretted at a later time. * Elimination of items by families leads to a loss of fixed overhead recovery.

Answer 29

Disadvantages of Full Itemization

Question 30

Charges broken down into several major component oarts- usually four- professional service, use of facilities, rolling stock, merchandise.

Answer 30

Functional Pricing

Question 31

Became more extensively used in the 1960's. It was initiated to impart more knowledge to the consumer. * Designed to bring uniform order in response to legislation at the time. * FTC requires further itemization * Designed as a compromise to reduce pressure against funeral service by memorial societies.

Answer 31

History of Functional Pricing

Question 32

* Newest and most progessive form of pricing. * Generally considered criticism free. * Emphasizes funeral director as professional offering service to public, not just seller of merchandise. * Funeral director has recovered overhead and most of his profit prior to entering the selection room.

Answer 32

Advantages of Functional Pricing

Question 33

* Declinable charges * Indigent funeral swill have to be priced seprately

Answer 33

Disadvantages of Functional Pricing

Question 34

Items obtained from a third party and paid for by the funeral provider on the purchaser's behalf.

Answer 34

Cash Advanced Items

Question 35

* Clergy offering * Death notice in newspaper * Certified copies of death certificate * Cemetery or crematory charges * Shipping costs * Flowers * Any other cash accommodation

Answer 35

Examples of Cash Advanced Items: