Pricing Strategies

Question 1

Penetration Pricing

Answer 1

Initial low price to increase market share

e.g. TV Satelite Company

Question 2

Skimming Pricing

Answer 2

Initial high price. Price lowers over time to attract wider market

e.g. Games Console

Question 3

Competition Pricing

Answer 3

Price set in comparison with competitors. Price lower, the same or higher

e.g. Price Match/Beat

Question 4

Product Line Pricing

Answer 4

Different products within the same product range

e.g. DVD Players HD/non HD

Question 5

Bundle Pricing

Answer 5

Bundle group of product at reduced price

e.g. BOGOF

Question 6

Psychological Pricing

Answer 6

Psychology of the price is considered

e.g. R199 instead of R200

Question 7

Premium Pricing

Answer 7

High price to reflect exclusiveness of product

e.g. Porche/ First class airline tickets

Question 8

Optional Pricing

Answer 8

Optional extras sold on top of standard product

e.g. Car industry

Question 9

Cost Based Pricing

Answer 9

Cost of production and distribution as base

e.g. Volatile markets

Question 10

Cost Plus Pricing

Answer 10

Add a percentage to costs for profit margin