Marketing - price Flashcards
What is the definition of price ?
This is what customers pay in order to obtain the product
price must :
cover costs
not be too high for the target market
What are some pricing stratagies ?
PREMIUM PRICING - price set higher than competitors to achieve the image of quality
LOW PRICING - price set lower than competitors to be a cheaper alternative
PSYCHOLOGICAL PRICING - price set just below a whole number to appear cheaper eg: 99p, £249
PRICE SKIMMING - new product enters the market at a higher price then lowers over time
COST PLUS PRICING - strategy used to set the price cost to makes the product is calculated then a % of profit added to create price
DESTROYER PRICING - price of the product is set much lower than competitors so they cant compete
What are factors to consider when setting a price ?
- Competition
- Quality of raw materials
- Image
- Production cost
- Profit per unit
- The economy
- Demand
