A-level Business Studies Lesson 19 (3.3.4)

Question 1

Penetration pricing

Answer 1

A strategy in which low prices are set to break into a market or to achieve a sudden increase in market share.

Question 2

Price skimming

Answer 2

A strategy in which a high price is set to yield a high profit margin.

Question 3

Dynamic pricing

Answer 3

An approach which uses a flexible system of pricing based on market factors. A product's price may change at short notice according to changes in supply or demand. It can also involve charging different prices to different customers based on their willingness to pay.

Question 4

Price war

Answer 4

This occurs when rival companies undercut each other's price
cuts in order to increase sales volume by keeping existing customers and attracting new customers. This strategy leads to reduced profit margins.

Question 5

Branding

Answer 5

Process of differentiating a product from its competitors through the name, sign, symbol, design or slogan linked to that product.

Question 6

Advertising

Answer 6

Process of communicating with customers or potential customers through specific media, e.g. Television and newspapers.

Question 7

Promotion

Answer 7

In the context of marketing, the process of communicating with customers or potential customers. Promotion can also describe communication with other interested groups, such as
shareholders and suppliers.