Price

Question 1

what are price takers?

Answer 1

follow the lead of the price makers

Question 2

what are price makers?

Answer 2

set the price of products

Question 3

what is penetration pricing?

Answer 3

pricing a product at a low level to gain market share (then increasing the price once market share is gained)

Question 4

what is going rate pricing?

Answer 4

accepting the current market price (price taker)

Question 5

what is price skimming?

Answer 5

charging a high price for a product with a USP (then selling at a lower price to a wider market)

Question 6

what is destroyer pricing?

Answer 6

setting a price low enough to drive competitors out of the makret

Question 7

psychological pricing

Answer 7

prices are set to what the consumers expect to pay - they perceive that they are receiving good value

Question 8

what is contribution pricing?

Answer 8

variable cost + contribution towards overheads and profits

Question 9

what is cost plus pricing?

Answer 9

cost of production + profit percentage

Question 10

what is loss leader pricing?

Answer 10

selling products at a loss - hope to generate further sales somewhere else in the business