International Marketing Mix - Pricing

Question 1

Pricing strategies

Answer 1

• Pricing a product too high or too low could mean a loss of sales for the organization.
• The pricing strategies are based on what objectives the company has set itself to achieve.

Question 2

Penetration Pricing

Answer 2

• Where the organization sets a low price to increase sales and market share.
• In an international market, this would influence buyers to try your product

Question 3

Price Skimming

Answer 3

• Entering a market at a high price during the introductory phase
• Early adopters can help migrate the high cost of entering the new country
• Skimming provides the image that the product is innovative and exclusive
• Once the early adopters have tried the product, the company then lowers the price

Question 4

Competition Pricing

Answer 4

• Setting a price in comparison with competitors.
• A firm has three options, price lower, price the same, or price higher.

Question 5

Product Line Pricing

Answer 5

Pricing different products within the same product range at different price points.

Question 6

Premium Pricing

Answer 6

• The price is set high to reflect the exclusiveness of the product.
• Evokes an illusion of luxury and high quality
• High price is sustained

Question 7

Psychological Pricing

Answer 7

• The seller will consider the psychology and the positioning of price within the market place.
• The seller will therefore charge $199 instead of $200.
• Provides an illusion of less money because consumers tend to concentrate on the first number rather than the whole number