definitions of pricing strategies Flashcards
1
Q
what is cost plus pricing?
A
the cost to produce the products are worked out then the money is added on top
2
Q
what is competitive pricing?
A
products/services prices are in line with competitors
3
Q
what is price skimming?
A
products priced high to begin with as it has a desirable factor
Setting a high price at the launch of a product, to take
advantage of those wanting to be the first people to
purchase.
4
Q
what is penetration pricing?
A
setting prices really low on a new product
5
Q
what is predatory pricing?
A
purposely lower prices so that competitors cannot make a profit if entering the market/drive out existing businesses
6
Q
what is psychological pricing?
A
e.g. £1.99 instead of £2 to appear cheaper
7
Q
factors that determine the most appropriate pricing startegy
A
- number of usps/ amount of differentiation
- price elastcity of demand
- level of competition
- strength of brand
- stage in the product life cycle
- cost and the need to make profit
