marketing 2

Question 1

What is Price-skimming?

Answer 1

=Setting a high price for a product when it first enters the market.

Question 2

Give advantages of skimming. (give 3)

Answer 2

= Higher profit
=Covers research and development costs
=Gain reputation and loyalty.

Question 3

Give disadvantages of skimming. (give 2lg)

Answer 3

=Low-growth due to high prices

=Harder to attract customers

Question 4

What is cost-plus pricing?

Answer 4

=Adding a percentage to the cost of producing a product so that profit is made.

Question 5

Give advantages of cost-plus pricing. (2)

Answer 5

=Profit guaranteed on each product/item sold

=Don’t need to do research (cost-plus calculations)

Question 6

What is the formula for cost-plus pricing ?

Answer 6

Price= unit cost + (mark-up x unit costs)

Question 7

Give a disadvantage of cost-plus pricing. (1!!!!!)

Answer 7

=If mark-up is too high, price maybe higher than rivals therefore uncompetitive.

Question 8

What is E-commerce?

Answer 8

=Buying/selling goods online

Question 9

What is advertising?

Answer 9

=Any method of promotion that is paid for