1.3.3 Pricing Strategies Flashcards

1
Q

Definition of Cost Plus

A

When a business calculates the cost of production then adds a markup to get selling price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Definition of Price Skimming

A

When a business sets a price high at first but can gradually lower

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Definition of Penetration

A

When a business sets a low price at first but can gradually increase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Definition of Predatory

A

When a business sets prices so low it drives out competitors (illegal)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Definition of Competitive

A

When a business sets prices based on its competitors prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Definition of Psychological

A

When a business takes into account customers attitudes so they perceive the price as better

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How does USP/Differentiation affect Pricing

A

Products with more USP’s can demand higher prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How does PED affect Pricing

A

Businesses will need to consider substitutes and competitors prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How does Competition affect Pricing

A

In highly competitive markets, businesses will need to set prices lower

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How does Brand Strength affect Pricing

A

A string brand can command higher prices because of loyalty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How does Costs affect Pricing

A

Prices will need to cover cost of production to provide sustainable profit margin

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How does Product Life Cycle affect Pricing

A

Intro - Prices lower
Growth - Prices Increase
Maturity - Prices can lower
Decline - Prices discounted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How has Pricing changed to Online Sales

A

-Dynamic pricing has been used
-Prices can be higher when supplies low
-Prices online compared to physical store can be different depending on what the business wants to pursue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How has Pricing changed to Price Comparison Sites

A

-Businesses need to stay competitive as consumers can easily compare prices
-Price matching polices can be introduced
-Businesses can also compare their prices and adjust to competitors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly