2.4 The Marketing Mix- Price Flashcards
Marketing definition (2p)
- Forms the link between the business and the cutomer
- Determines the type and quantity of products to be designed, produced and sold
The marketing mix (2p)
- The combination of factors which help the business to take into account customer needs when selling a product
- 4ps
4ps
Product
Price
Promotion
Place
Pricing strategies (6p)
- Premium pricing
- Cost plus
- Competition
- Penetration
- Skimming
- Promotional
Premium pricing
- High price for perceived high quality products
Cost-plus pricing
Add % profit to actual cost
Competition pricing
Charge a price similar to competitors
Penetration pricing
Start with a lower price to attract customers
Skimming pricing
Start with a high price for a unique product
Promotional pricing
Special price for a limited time
Premium pricing advantages (2p)
- only certain customers can afford so maintains image
- High profits
Premium pricing disadvantages
Lots of potential sales lost
Cost plus advantages
- Ensures a profit is made
Cost plus disadvantages
- May not be able to sell product because it could become too expensive
Competition pricing advantages
Price will be able to compete with competitors
Competition pricing disadvantages
Price may not be profitable
Penetration pricing advantages
Encourages people to try
Penetration pricing disadvantages
Can’t last long
Skimming pricing advantages
Allows extra profits to be made
Skimming pricing disadvantages
Only last while there is no competition
Promotional pricing advantages
Useful to get rid of old stock
Promotional pricing disadvantages
Only useful for a limited time
