Margins and Sales Volumes of Restaurants

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Margins and sales volumes Abstract Profit margins, sales volumes and markups are important to all businesses since they impact their profitability and ability to break-even ADDIN EN.CITE Allayannis2001600(Allayannis & Ihrig, 2001)60060017Allayannis, GeorgeIhrig, JaneExposure and MarkupsThe Review of Financial StudiesThe Review of Financial Studies805-8351432001Oxford University Press. Sponsor: The Society for Financial Studies.08939454http://www.jstor.org/stable/269677410.2307/2696774( HYPERLINK l "_ENREF_1" o "Allayannis, 2001 #600" Allayannis & Ihrig, 2001). These items help the business to set a fair price based on the perceived value of the product by the consumer. Each industry has its own typical values for profit margins and markups and they differ from one industry to another. These values are influenced by demand, competitive rivalry and addition of value to products and services which gives them additional competitive advantage. This paper focuses on three industries which are the food and beverages industry, retail goods industry and biotechnology industry which have different values of markups and profit margins. It defines each industry and gives the ranges of markups and profit margins which are typical for these industries. The second part then looks at how this information on markups and profit margins can be applied by consumers in future purchases as well as the marketing techniques that can be instituted by the companies to match their pricing

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