Price and Marketing Mix Flashcards
What factors contribute to a business deciding on a price?
Competitor price
Costs to make and distribute products
Other costs for the business
Is the product luxury or essential
Business’s existing products and brand
Is the product disposable or reusable
Making a profit
Define the phrase ‘focus on costs’.
The business is focused on covering their costs
Define the phrase ‘focus on the market’.
The business is looking outside of the business at the competition
What are the two types of ‘focus on costs’ pricing strategies?
Cost plus pricing
Mark-up pricing
What is cost plus pricing?
Calculate how much it would cost to make or buy a product and then add a percentage profit
What is mark-up pricing?
Calculate how much it would cost to make or buy a product and add a percentage mark-up
What are the five types of ‘focus on the market’ pricing strategies?
Competitive pricing
Price taking
Skimming
Premium pricing
Penetration pricing
What is competitive pricing?
Asking a similar price as the competition
What is price taking?
Asking the exact same price as the competition
What is skimming?
Asking a high price to take advantage of a new product
What is premium pricing?
Asking a high price for a luxury or desirable product
What is penetration pricing?
Asking a low price to interest people
