2:2 Marketing Mix - Price

Question 1

Marketing mix

Answer 1

Describes all the activities which are used in making a business’s products

Question 2

Name the four P’s

Answer 2

Price, Product, Promotion and Place

Question 3

Skimming

Answer 3

Setting a high price in an attempt to get more profit as some people are willing to pay higher prices for a new and unique product. Later on price is lowered to maintain sales.

advantages: high initial price gives the impression of high quality, covers the high cost of development

disadvantages: some people might not purchase

Question 3

Penetration

Answer 3

Low price is set at the beginning in order to gain entry into the market, used in competitive markets. Price is increased over time once entry is secured.

advantages: new customers are attracted to low prices
can build up a loyal customer base

disadvantages: profits will be minimal, can only be used for a short time

Question 4

Competitor Based

Answer 4

Business accepts its competitors prices and changes theirs to lower or the same.

advantages: may make more profit by having cheaper prices

disadvantages: have to monitor competitors.

Question 4

Competitor Based

Answer 4

Business accepts its competitors prices and changes theirs to lower or the same.

advantages: may make more profit by having cheaper prices

disadvantages: have to monitor competitors.