Pricing strategies

Question 1

What is price skimming

Answer 1

Start with a high price at the beginning of the products life cycle and gradually reducing it as the product moves along the cycle
Example=technology

Question 2

What is Price penetration

Answer 2

Selling a product with a low price at the start of the product life cycle to gain market share and gradually increasing the price over time

Question 3

What is competition pricing
And who are price takers and setters

Answer 3

firms will set prices based on the prices of their competitors
A price taker is someone who aims to imitate prices
A price maker is who price takers aim to copy

Question 4

What is predatory pricing

Answer 4

Charging especially low prices to put competitors at a disadvantage and trying to force them to leave the market as the firm tries to gain 100% market share

Question 5

What is a loss leader

Answer 5

Selling some products in the product portfolio at a loss to gain market share and then encouraging the consumption of other products in the product portfolio that are more profitable