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Business - Pricing
Pricing Strategies for Business Studies
Question | Answer |
---|---|
Cost Plus | The owner works out all the costs involved in selling and adds either a flat rate amount or a percentage increase. Gives Final selling price |
Destroyer Pricing | This is when a business prices their product so low that no other businesses can compete therefore eliminating the competition. This is Illegal |
Loss Leader | This is when a business sells a product at a loss in order to bring customers in to the store to then buy other things. Supermarkets often use this. |
Price Skimming | This involves charging more than competitors on the basis of quality and luxury. Often used when releasing new products eg Apple Watch |
Price Penetration | This involves deliberately charging a low price than a competitor to get their products sold in as little time as possible to get a foothold in the market |
Competitive Pricing | Looking at the prices of competitors and charging a similar price for the product. |