Pricing Strategies Flashcards
Skimming
Launching with a high price then reducing the price later e.g technology
Penetration
Low price charged initially to penetrate market and build brand loyalty, price is then increased
Competitive
Similar price is charged to they of competitors products
Dynamic
Prices change rapidly In response to changes in demand conditions
Psychological
Price set which customers perceive as lower e.g 1.99, 2.00
Differential
Different prices charged for same product e.g child, adult tickets
Cost plus
Additional mark up is added to the cost of producing a good or service
Loss leader
Products may be sold at a price lower than the cost to produce often used in supermarkets
Influences of pricing strategies
1) price elasticity of demand
2) price to produce
3) positioning
4) level of competition
5) stage in the product life cycle
6) level of demand
7) quality of product
8) objectives of the firm
