Price Flashcards

1
Q

What is the difference between Price-Takers and Price-Makers

A

The market mechanism sets a price and a predetermined quantity to supply(have to accept )(Perfect competition)

Sets pricing
Market-orientated(Buyers willing to pay) / Cost-Based Strats(suppliers willing to sell)

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2
Q

What factors affect pricing ?

A

Type of product
Product range
Economic issues
Level of competition
Financial strength (EOS)

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3
Q

What is Price skimming?

A

Charging a high price (USP) for a limited period of time.

Take advantage of the newness gain as much revenue

Generate revenue in a short period

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4
Q

What is Penetration Pricing ?

A

Charging a low price so that consumers and retailers buy in bulk

Brand loyalty
Low quality

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5
Q

what is Loss leader pricing ?

A

Selling a product at a loss to generate further sales in another product

Milk+Bread

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6
Q

what is Destroyer/Predator Pricing ?

A

Selling products a low price to drive competitors out off the market

Tesco (Apples)

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7
Q

what is competitive based pricing ?

A

Selling products at current market pricing (Price takers)

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8
Q

What is psychological pricing ?

A

Selling products that matches what consumers may expect to pay

£1499

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9
Q

What is cost-plus pricing ?

A

Adding a profit percentage to average cost of production

Changes in cost (Lead to happier customers)
Sold at profit

Competitors ignored
No currency exchange

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10
Q

What is contribution pricing?

A

Selling goods based on the variable cost plus a contribution towards overheads and profit

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11
Q

What is Full-cost pricing ?

A

Selling goods including Fixed costs and contribution and overheads and profits.

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12
Q

Pros and cons of using Pricing strategies ?

A

Increase sales,Increase Revenue , Increase Profit

Price discrimination

Competitive pricing

Expensive advertising to promote pricing Strat

Some segments may not be happy getting charged high prices (Gym)

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