Comps Funeral Merchandising Listing Questions

Buying Motives

1. Comfort

2. Convenience

3. Security

4. Prestige

5. Health/ economy

Fixed Expenses

1. Rent

2. Supervisory

3. Salaries

4. Depreciation

5. Insurance

6. Debt

Types of Advertising Media

1. Radio

2. Newspaper

3. Billboard

4. Internet

5. Television

6. Telephone

7. Direct mail

4 ways a company can manage risk

1. Eliminate

2. Minimize

3. Shift

4. Absorb

4 Functions of management

1. Planning

2. Organizing

3. Directing/ (Actuating)

4. Controlling (Evaluating)

Theory X

• The average person inherently dislikes work and will avoid it if possible

• Because of the dislike of work, most people must be coerced, controlled, directed, and threatened with punishment to get them to perform effectively.

• The average person lacks ambition, avoids responsibility, and seeks security and economic rewards above all else

• Most people lack creative ability and are resistant to change.

• Since most people are self-centered, they are not concerned with the goals of the organization.

Theory Y

• The expenditure of physical and mental effort in work is as natural as play or rest

• People will exercise self-direction and self-control in the service of objectives to which they are committed.

• Commitment to objectives is a function of the rewards associated with achievement.

• The average person learns, under proper conditions, not only to accept but to seek responsibility.

• The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, distributed in the population

Frederick Herzberg's “Two-Factor Theory”

proposes that man has two different sets of needs. One set is man's desire to avoid pain and satisfy basic needs; the higher set relates to a unique human characteristic of being able to achieve and experience psychological growth.

What are the levels of Maslow’s Hierarchy of Needs (need to know them in order):

1. Physiological needs (This is the LOWEST level)

2. Safety needs

3. Belongingness and love (social needs)

4. Esteem

5. Self Actualizing needs (This is the HIGHEST level)

McGregor

“Theory X and Theory Y” was introduced by

Public Relations

the funeral director can improve their relationship with the public by giving information on funeral service topics.

Consumer Value Index (CVI)

Wholesale Cost / Retail Price = CVI

$200 / $600 = .33 or 33%

A casket costs the funeral home $200. The family is charged $600. What is the CVI?

If a funeral Director purchased a casket for $325 and sold it for $900 the consumer value index (CVI) for that piece of merchandise would be:

Wholesale Cost / Retail Price = CVI

$325/ $900= 36%

Consumer value index

The percentage derived by dividing the wholesale amount of the merchandise by the retail price of the merchandise yields the:

The higher the percentage, the greater the value to the consumer

The consumer value index – which number would help the consumer:

The Advantages of the declining price structure:

1. CVI improves with higher priced caskets

2. Encourages consumer to buy better merchandise

3. Win-win situation

The Disadvantage of the declining price structure:

Low end markup may be too aggressive in some markets

Gross Casket Profit (Margin)

Retail Price - Wholesale Cost = Margin

$600 - $200 = $400

A casket costs the funeral home $200. The family is charged $600. What is the Margin (Profit)?

If a casket cost $200 wholesale and was sold for $1,000, and the average overhead per funeral was $500, what would the (margin) profit be?

The average overhead per funeral does not figure into finding the (margin) profit for the casket.

$1,000 - $200 = $800

The retail price – the wholesale cost = profit (margin)

Net Profit

Retail price – Wholesale cost (Do NOT count the average overhead) Casket wholesale cost was $1,000 and was sold for $5,000 Net profit is $4,000

Merchandise Value Ratio (MVR)

Wholesale Cost / Service &Merchandise =MVR

$2,000 / $5,000 = .40 or 40%

XYZ Funeral Home sold a funeral to the XX family for $5,000. The wholesale price of the merchandise sold was $2,000. What is the MVR?

$200 × 3 = $600

The casket cost the funeral director $200. The funeral home's fixed multiple is 3. What is the selling price?

$100 × 5 = $500

If a casket cost $100 and the funeral home’s fixed multiple was 5, what would the selling price of that casket be?

Fixed Multiple (Straight Line)

• The disadvantage of the fixed multiple: there is no improvement in the CVI & no incentive for the consumer to buy-up.

• The advantages are: It is easy to use & provides quality

Unit Pricing

A pricing procedure which creates a total price for service and casket.

Example: If a funeral home had an average overhead of $650, and the wholesale cost of the casket was $100, and the funeral director marked his casket up 100%, what would the Unit price be?

Answer: 100% mark-up on $100 is $200 for the casket.

The overhead is $650 so the $200 is added to the overhead = $850 charge for the service and casket.

$900 ($90,000 / 100)

100 casketed funerals, $90,000 total wholesale cost of caskets. What is the average cost of the casket?

Total overhead / # of services = Average Overhead

$50,000 / 50 = $1,000

If the total overhead for a funeral home was $50,000 for a fiscal period, and the firm did 50 services, what would the average overhead per service be?

Average (Mean) – the sum of a group of numbers divided by the number of units

Example: A director’s casket sales for the week are:

$700

$1,500

$1,200

$800

$4,200

$4,200 / 4 = $1,050

$1,050 = Average Sale (or Mean

Median – the midpoint

Example: A director’s casket sales for the week:

$700

$800

$900 – Median

$1,000

$1,100

(If there are 2 #s at the midpoint, then add them together and divide by 2 to get the correct midpoint.)

Example:

$500

$600

$800

$900

$1,000

$1,100

($800 + $900 = $1,700 $1,700 / 2 = $850 is the median)

Mode – The number that appears most frequently in a list of numbers

Example: A director’s casket sales for a week:

$750

$925

$925

$1,175

$1,525

$ 925

$925 = Mode

900 (the middle – equal values above and below)

700, 900, 800, 1200, 1200 What is the median?

Quartile

Caskets can be divided into 4 categories:

4th Quartile

The most expensive caskets are in the:

1st Quartile

The least expensive caskets are in the:

30 x 86 (the inside width – 30")

The inside dimensions of a vault:

Dimensions of caskets - XXX

(over-size increases in size by 2 inches in width & 3 inches in length, each step increase is represented by an X)

The average wood - 75 x 22 inches inside

The average metal - 78 x 23 inches inside

84 x 29 inches outside

86 x 30 inches inside

The standard vault inside dimensions are:

To determine if a casket will fit in the vault

measure the outside of the casket and the inside of the vault

30in. – 23 in = 7 in. 7 in. / 2 in. = 3.5 or 4X

The deceased measures 30 inches in width, the oversized metal casket ordered would be: 4X)

(Measure from elbow to elbow)

29 in

The dimensions of a steel (metal/ferrous) casket are 6’6” long and 23” wide. A casket invoiced as 6’6” XXX would be how many inches wide:

3 inches

Caskets increase in length in increments of:

2 inches

Caskets increase in width in increments of:

you may have to use an oversized vault (not always!)

If you use an oversized casket….

Infant caskets

increase in length in increments of 6 inches (up to 5 feet in length). They increase in height by increments of 9 inches.

main level

The best location for a casket selection room in the funeral home is the

12 – 30

How many caskets should be shown in a casket selection room

40 – 60 square feet

should be allotted per casket.

floor to bottom of caskets 26” to 30”

to display caskets

Direct Selection Room Procedure

the funeral director stays in the selection room the entire time and gives the family more support.

Indirection Selection Room Procedure

(funeral director does NOT stay in the room) - requires the family be given adequate pre-counseling

Advantages of Indirect Selection Room Procedure

more privacy, no influence from the funeral director, no non-verbal communication, no misinterpretation, need written information about each casket

Disadvantages of Indirect Selection Room Procedure

some prefer the support, cannot answer questions, information can be misinterpreted

Indirect incandescent

is the best lighting option for the selection room

A vertical computer program

could replace a traditional casket display room

protective

The term ______ indicates that the casket is designed to resist the entrance of outside elements. The funeral director cannot tell the family that the casket will preserve the remains.

elliptic, octagon, round corner, square corner

End or corner designs on a casket include _______, ________, _________, _________

Perfection Full Couch Caskets & Perfection Half Couch Caskets

--There is no distinction between the head and foot panels in the Full Couch

--There is no gasket channel in the full couch

(They both have a Base Molding and Rim or Ogee Flange. They both also have a pie/fishtail)

A half couch casket would have a header and gasket channel (holds the gasket in the space between the head & foot caps) but these would NOT be found in a full couch casket

Coniferous

(from cone-bearing trees) – softwood (Pine, Cedar, Fir, Redwood)

Deciduous

(from trees that lose their leaves annually) – hardwood (Birch, Poplar, Cherry, Maple, Mahogany, Oak, Walnut, Gum)

Hardwoods

The _______ are more expensive than the softwoods

Mahogany

_________ is the Premier Hardwood and most expensive

premier hardwoods can cost more than metal caskets

The _______________ because of the species of woods that have to be imported and the amount of workmanship required to construct them.

Steel & Stainless Steel (Ferrous)

• Measured by gauge

300 series has Nickle & Chromium (The Chromium prevents rust)

400 series does NOT have Nickle

1 inch

The gauge of a steel casket is equivalent to the number of steel sheets placed on top of one another to equal the thickness of

• The lower the number, the thicker and heavier the metal (a 16 gauge casket is thicker and heavier than an 18 or 20 gauge)

copper & bronze

Precious metals include

Iron

a metal that is ferrous (Steel & Stainless Steel are ferrous metals NOT precious metals) – they are made of an alloy of iron & carbon

Alloy

Stainless steel is an alloy of (steel, chromium, & sometimes nickel) – chromium is added to the steel to prevent rust.

Bronze is an alloy of (90% copper with tin & sometimes zinc) – does not rust – more durable than copper or steel

Premier Metal; Cost & Durability

Bronze is considered the ________ because of __________

ounces per square foot

The most commonly accepted means of measuring thickness of copper and bronze caskets is?

32 oz. copper – one square foot will weigh 32 oz.

48 oz. copper – one square foot will weigh 48 oz.

(This is called “Brown & Sharpe Guage”) (there is 16 oz in 1 pound)

6 inches in length up to 5 feet; 9 inches in height;

Infant casket sizes increase by:

Interior styles for a casket

interior styles include: crushed, shirred, tufted, tailored, semi-tailored, specialty head panels, & combination of more than one style

Linings (interior materials) include:

• Crepe

• Satin

• Velvet - in expensive caskets

• Linen

• Linen Weave

• Twill Weave

(Linings are used to dress or drape a casket)

Padding Materials

• Cotton

• Polyethylene foam

• Shredded paper

• Spun polyester

• excelsior (wool wood)- wood shavings

Kapoc could be used for padding

Backing Materials

• Fiberboard (cardboard)

• Masselin

• Plastic

Implied warranties

are imposed by law and arise automatically because the sale was made. If the buyer is relying on the skill of the seller in selecting suitable goods, then an implied warranty is created. Implied warranties apply to merchants, not yard-sale vendors.

Express warranties

are made by the seller either orally or in writing at the time of the sale. Disclaimers are usually required so that there are no surprises for the buyer (Statements such as “as is,” or “with all faults.”) The seller can refrain from making promises about the goods

Example of a disclaimer of warranties

Disclaimer of warranties: Funeral Home makes no warranties or representations concerning the products sold herein. The only warranties, expressed or implied, granted in connection with the products sold with this funeral services, are the expressed written warranties, if any, extended by the manufacturers thereof. The Funeral Home hereby expressly disclaims all warranties, express or implied, relating to all such products, including, but not limited to, the implied warranties or merchantability and fitness for a particular purpose.

Magnuson-Moss Warranty Act

is covered in the Mortuary Law book. Section 15.3. Specifically, the Magnuson-Moss Warranty Act is a federal statute which governs Express and Implied warranties.

As a seller, funeral directors are providing warranties on the merchandise they sell even though they do not manufacture it.

3 days

If a preneed sale takes place outside of the funeral establishment, the customer may cancel the contract within

reduction of assets for Medicaid eligibility

A benefit of an irrevocable pre-funded preneed arrangement is a…

2-5%

It is recommended that funeral home spend ________ of its yearly gross income on advertising

“Thermal Reduction”

refers to keeping remains in a refrigeration unit (This is a contractual term used by some funeral homes when they charge for having remains stored in their refrigeration units. This is not often incurred by family. It usually comes about when a deceased is left in the care of a funeral home for an extraordinary amount of time.)

The “strategic planning process” contains:

1. Planning (The mission statement & goals)

2. Organization

3. Directing (Actuating)

4. Evaluating (Controlling)

5. Motivating

3 – 5 years

Long-term goals are usually set for:

The state requires the funeral home to pay 8% sales tax on merchandise. Prices are:

services $3,000

casket $2000

vault $1200

total $6200

How much sales tax does the funeral director pay the state?

$256 (Casket 2000 + vault 1200 multiplied by .08)

(services would not be included)

employee job description

OSHA required employee training is determined by the

Bloodborne Pathogen

Funeral homes are required to provide training, protective clothing, and a vaccination against hepatitis B under the ___________ OSHA standard.

Insurance

The uneventful protection for the small business or small business owner in regards to monetary compensation in the event that a business and/or personal peril is experienced

Casualty

If a business has been damaged by fire, flood, etc. (they will pay for the damage)

Business Interruption

Coverage pays for lost income and other expenses when a company has been damaged by fire, flood, etc –

Coinsurance Clause

A company or person agrees to have insurance for a percentage of the property value otherwise they would have to pay for that portion if something happened (any loss such as a fire, flood, etc) –

Credit

Protects a non-retailing business from abnormal bad-debt losses

General Liability

Insurance that would cover customers who might get injured on the property or by a product sold to them

Product Liability

Insurance that would protect against claims that its product caused bodily injury or property damage to the user

Liability

Insurance that covers business liability to customers of others who might be injured from the product sold to them

Self-insurance

A contingency fund that a company sets aside for possible future losses, such as property, medical, or worker’s compensation