Pricing strategies

Question 1

what is penetrating pricing?

Answer 1

increasing the price over time

Question 2

what is a company that uses penetration pricing?

Answer 2

Starbucks

Question 3

what is skimming pricing?

Answer 3

decreasing prices over time

Question 4

what is a company that uses skimming pricing?

Answer 4

Apple

Question 5

what is competitive pricing?

Answer 5

setting prices based on competitors prices

Question 6

what is a company that uses competitive pricing?

Answer 6

Amazon

Question 7

what is premium pricing?

Answer 7

pricing higher than competitors

Question 8

what is a company that uses premium pricing?

Answer 8

Rolex

Question 9

what is cost-plus pricing?

Answer 9

the making of a product plus a percentage of that

Question 10

what is a company that uses cosy-plus pricing?

Answer 10

Tesco

Question 11

what are some advantages of skimming pricing?

Answer 11

create a high-end brand image, increase customer loyalty, and provides money for product development

Question 12

what are some disadvantages of skimming pricing?

Answer 12

customers may become turned off by the price decrease, doesn’t work if competitors are doing similar, and may end up with excess inventory if it fails

Question 13

what are some advantages of penetration pricing?

Answer 13

increase customer interest, reduce competition, and word-of-mouth marketing

Question 14

what are some disadvantages of penetration pricing?

Answer 14

poor customer experience, potential damage to brand, and in market price wars

Question 15

what are some advantages of competitive pricing?

Answer 15

helps businesses understand their market position, attract new customers, and boost profits

Question 16

what are some disadvantages of competitive pricing?

Answer 16

it can be inaccurate, doesn’t focus on customers, and potential loss of profit

Question 17

what are some advantages of premium pricing?

Answer 17

boots profitability, improves company reputation, and increases price flow

Question 18

what are some disadvantages of premium pricing?

Answer 18

customers expect more when they pay more, requires a USP/consumer demand, and tricky to get right with so many varying factors at play

Question 19

what are some advantages of cost-plus pricing?

Answer 19

easy to calculate, clearly sustainable, and easy to explain to customers

Question 20

what are some disadvantages of cost-plus pricing?

Answer 20

doesn’t really reflect market decisions, may not reflect true value of p/s, and may miss out on opportunities to maximise revenue