Price In The Marketing Mix Flashcards
What is cost-plus pricing?
Adding a percentage profit margin to the cost of supplying a good or service
What is an advantage and disadvantage of cost-plus pricing?
Advantage: The business knows for sure that they’ll make a profit on each item sold •Disadvantage: It could be too expensive for some customers
What is competitor based pricing?
Setting a price based on the prices charged by competitors for similar products.
What is an advantage and disadvantage of competitor based pricing?
Advantage: You won’t lose customers by being more expensive than other businesses. Disadvantage: You might not be able to cover your costs, especially if a smaller business.
What is penetration pricing?
Setting a low price for a new business or product in order to attract customers. The price is likely to be raised as the product or business becomes popular.
