VLOOKUP advice

I hope I have typed it correctly according to the rules. I wanted to know how exactly this code understands to minus the percentage in C33.

I love the idea of it being able to search for a word from a group and adjusting the values.

=VLOOKUP(A2,$B$33:$D$36,3,FALSE)*$F2

With this type of formula I could take a trade price and make it estimate a price according to what kind of product it is, correct?
Food - 50%
Treats - 80%
etc