2.4 The marketing mix - price

Question 1

Price

Answer 1

The amount of money a customer is willing to pay to buy a product.

Question 2

why is there price

Answer 2

In order for businesses to survive they need to make a profit, putting prices in place allows this. The price must reflect the image and quality of the product.

Question 3

5 different pricing strategies

Answer 3

skimming
cost-plus
promotional
competitor
penetration

Question 4

Factors to consider when choosing a price

Answer 4

The costs of producing the product
How new the product is
How well customers know the product already
The number and nature of the competitors
The quality of the product
What stage of the product life cycle the product is at

Question 5

Skimming

Answer 5

A price is set high at the beginning before reducing at a later date when competitor products begin to be sold.

Question 6

Penetration pricing

Answer 6

A low price is charged for a new product to persuade customers to try it, then increased when sales grow

Question 7

Cost-plus pricing

Answer 7

A pricing method that adds a percentage for profit to the total costs of making the product.

Question 8

Promotional pricing

Answer 8

Reducing prices to give products a boost sales of slowing products or to sell off old stock.

Question 9

Competitor pricing

Answer 9

A price set based on the prices charged by competitors for a similar product.