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Marketing- Price
| Question | Answer |
|---|---|
| Price | This is the amount customers pay for a product or service offered by a business. Pricing is influenced by many factors & many strategies will be used to decide on the price. It affects- how viable the brand is and how profitable the business will be. |
| Name 3 Low Pricing Strategies | Penetration Pricing, Loss Leader, Price Discrimination |
| Penetration Pricing | The price is set lower than its competition when you first enter the market with a new product. This is done in order to: Get a foothold of the market Gain market share Undercut competitors’ prices. |
| Loss Leader | The price of a product or service is DELIBERATELY SET AT A LOWER PRICE than the business paid: -To manufacture the product or -To provide the service. |
| Price Discrimination | The business charges different prices for different products. It knows that different people can afford different amounts. |
| Name 2 High Pricing Strategies | Premium Pricing, Price Skimming |
| Premium Pricing | The price is set high to reflect consumer’s perception of a superior product. This strategy is ideal for small businesses that sell unique or niche products. The product may have a USP or distinctive competitive advantage. |
| Price Skimming | A high price is set during the introductory phase to maximise profit and help cover R&D costs. The price is lowered as competitors’ products appear on the market. Business wants competitive advantage during the EARLY STAGES OF THE PRODUCT LIFE CYCLE. |
| Factors that influence the cost | Competitors, Demand, Type of Product, Stage of Product Life Cycle |
Created by:
MsHayes1
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