pricing

Question 1

cost plus pricing

Answer 1

is the cost of manufacturing the product plus a profit mark up

Question 2

how to calculate

Answer 2

$2000/ 200 +50% + $1.50

( 1+0.50= $1.50)

calculation to find 50% of 2000/2000 is:
2000/2000 * 50/100= 1*50/100=0.50

total cost/output* mark-up= mark up

Question 3

competitive pricing

Answer 3

it involves putting prices in line with your competitors prices or just below their prices to capture more of the market

Question 4

penetration pricing

Answer 4

is when the price is set lower than the competitors prices in order to be able to enter a new market. It would be used when trying to enter a new market the price would be set lower than the competitors

Question 5

price skimming

Answer 5

is where a high price is set for a new product on the market.
skimming can help to establish the product as being of good quality
it may put off some potential customers because of the high price

Question 6

promotional pricing

Answer 6

is when a product is sold at a very low price for a short period of time
it is useful for getting rid of unwanted stock what will not sell
it can help renew interest in a business if sales are falling

Question 7

phycological pricing

Answer 7

physiological pricing is an approach when particular attention is paid to the effect that the price of the product will have upon consumers perceptions of the products

Question 8

dynamic pricing

Answer 8

charge different prices to customers for the same product or service depending on time or level of demand