2.4 The Marketing Mix - Price Flashcards
Why should a business take care when setting a price?
Too low and the business won’t make enough profit, too high and customers will not buy the product.
What is Competitor Pricing?
A price is set based on prices charged by competitors.
What is Cost-plus Pricing?
Adding a percentage of profit onto the total costs of making a product.
What is Penetration Pricing?
A price is set lower than competitors.
What is Price Skimming?
A high price is charged initially for those customers who want the latest products.
What is Promotional Pricing?
Prices are reduced to give sales a boost.
What are some factors that can affect the price?
The price charged by other businesses.
The costs to produce the product or service.
If the business is new customers may not know the name and will be reluctant to pay high prices.
The income of the target market.
