Marketing - Price

Question 1

Name the 10 pricing strategies

Answer 1

1. Psychological pricing
2. Premium pricing
3. Price skimming
4. Cost-Plus pricing
5. Low pricing
6. Penetration pricing
7. Destroyer pricing
8. Competitive pricing
9. Promotional pricing
10. Price discrimination

Question 2

1. Describe Psychological pricing
2. Describe Promotional pricing
3. Describe Destroyer pricing

(pricing strats)

Answer 2

1. Price is set just below a whole number to make it seem cheaper
2. Price is reduced for a short time
3. Price is set much lower than competitors so they can’t compete

Question 3

1. Describe Price - skimming
2. Describe Penetration pricing
3. Describe Cost-Plus pricing

(pricing strat)

Answer 3

1. New product enters the market at a high price and lowers over time
2. Price is set low when entering the market then rises once the product becomes popular.
3. Cost to make the product is calculated then a % of profit added to create the price

Question 4

1. Describe Competitive pricing
2. Describe Price - Discrimination
3. Describe Premium pricing
4. Describe Low pricing

Answer 4

1. Charge the same price as competitors and compete on factors other than price
2. Charging different prices for the same product or service at different times of the day/year
3. Price is set higher than competitors to achieve the image of quality
4. Price is set lower than competitors to be the cheaper alternative

Question 5

Name and describe 5 factors a business must consider when setting a price

Answer 5

• Competition - business can copy competitors when it comes to pricing or use its own pricing strategy.
• Quality of Raw Materials - Price should reflect the quality of raw materials used
• Image - Price will reflect a customer’s perception of a product.
• Production cost - Price should be set higher than the production cost
• Profit per Unit - Business must consider how much profit they want to make on each product