How is price decided (CH 7)

Question 1

What’s the different pricing strategies?

Answer 1

• Cost plus pricing
• Price skimming
• Penetration
• Competitive pricing

Question 2

What is cost plus pricing?

Answer 2

Adding a fixed percentage to the cost of a product to generate profit via price

Question 3

What is price skimming?

Answer 3

Setting a high price when the product launches temporarily then gradually lowering it over time

Question 4

What is price penetration?

Answer 4

Setting a low price to gain fast market share to encourage customers to purchase and for brand loyalty

Question 5

What is competitive pricing?

Answer 5

Setting prices based off competitors

(used for similar products)

Question 6

Factors determining most appropriate pricing strategies

Answer 6

• No. of USPs / differentiation
• PED
• Stage in the product life cycle