marketing mix:price Flashcards
Price
amount of money produces are willing to sell to buy the product for
role of pricing decision
must set price which will fit with rest of marketing mix product and also need to be set near competitor prices
pricing strategy
a strategy businesses use to determine what prices they should charge
method of pricing
-cost plus
-competetive
-penetration
-price skimming
-promotional
-Psychological
-Dynamic
cost-plus
work out the cost of producing a product and add a percentage to ensure they make profit
cost-plus advantage
-quick way to work out price
-price cover all cost
cost plus disadvantage
price might be higher than competitors or more than costumer want to pay
competitive pricing
setting a price similar to competitors or just below
competetive pricing advantage
compete on other matters such as service and quality
competitive pricing disadvantage
-time and money
-need to find ways of competing to attract sales
penetration pricing
a product is launched with low price to get sales and gain market share
penetration advantage
-attract costumer fast
-increase market share fast
penetration disadvantage
-low revenue due to lower price
-cannot recover development cost fast
price skimming
a high price for a product because it stand out from the rest
price skimming advantage
-profit earn is very high
-help recover research and development cost
price skimming disadvantage
may backfire if competitors produce same product for lower price
promotional pricing
price your product at a low price for a small amount of time
promotion advantage
-help to sell unwanted stock
-good way to increase short term sale
promotion disadvantage
profit may be lower to do low rvenue
Psychological pricing
a strategy to that influence costumer perception and behaviour
psychological advantage
-little sales revenue is lost
-ensures sales are made
psychological disadvantage
-competetiors may do the same
dynamic pricing
charging different consumer different prices for the same product
dynamic advantage
-boost sales
-maximise profit
disadvantge
-lost sales
-price wars
factors that affect what pricing method should be use
-unique?
-new or existing?
-lots of competition
demand
consumer desires to buy good
price elasticity
a measure of responssivness of demand to a change in price
