KT9: 1.3.3 Pricing strategies, 1.3.4 Distribution

Question 1

loss leader

Answer 1

pricing a product below cost in order to attract further, profitable business. Sony did this at the launch of the PS3 and PS4- bring customers in who will then buy accessories and software

Question 2

Price elasticity

Answer 2

measurement of the extent to which a product’s demand changes when its price is changed

Question 3

Price sensitive

Answer 3

when customer demand for products facts sharply to a price change (that is, demand is highly price elastic)

Question 4

pricing tactics

Answer 4

short-term pricing responses to opportunities or threats

Question 5

barrier to entry

Answer 5

factors that make it hard for new firms to break into an existing market

Question 6

E-commerce

Answer 6

electronic commerce- carried out online

Question 7

impulse purchasing

Answer 7

buying in an unplanned way

Question 8

long tail

Answer 8

the huge amount of tiny businesses appealing to minority tastes that can find a profitable existence online because they can target the whole planet, not just the local area

Question 9

Opportunity cost

Answer 9

the cost of missing out on the next best alternative when making a decision

Question 10

wholesaler

Answer 10

the middleman between producers and retailers, who breaks bulk down from container lorry-loads into manageable parcels, such as a case of 12