Marketing Mix - Price

Question 1

What is cost based pricing

Answer 1

adding a percentage profit margin to the cost of supplying a good or service. It is also called COST-PLUS PRICING.

Question 2

What is competitor based pricing

Answer 2

setting a price based on the prices charged by competitors for similar products.

Question 3

What Penetration pricing

Answer 3

setting a low price for a new business or product in order to attract customers. The price is likely to be raised as the product or business becomes popular.

Question 4

What is price skimming

Answer 4

selling a product at a high price because there is no competition. It is often used with new innovations, and the price comes down when competitors have developed similar products. It is also called CREAMING.

Question 5

What is price discrimination

Answer 5

charging different prices for the same product to different groups of consumers.

Question 6

What is loss leader

Answer 6

a product that is sold at a loss in order to attract customers to buy other products being sold at their full price.

Question 7

What is Psychological pricing

Answer 7

means charging just below a significant figure to make the price more attractive (e.g. £9.99, £19.99, £99.99)