Pricing Strategy Flashcards
Cost plus is
Sets price of product that covers cost providing good profit margin
Pros of cost plus
Protects profit margins of business
Every product sold at profit
Cons of cost plus
Domr consider prices of comp
No considering currency when exported
Skimming price is
Start high helping pay research n development as competitors enter market price decrease
Pro of skimming price
High prics elasticity
Good harvest off of trendy and collectibles
Cons of skimming price
Cheaper version maybe available soon
Customers maybe put off be price
Competitive pricing is
In line with comp
Based on non price
Pros of comp pricing
Useful In domina.t market -other brands need to.offer lower to encourage customers to buy
Cons of comp pricing
Rates may not cover all costs for smaller business who can’t get same economies of scale
Penetrative pricing is
Rlly low on new product then when business rates go up, raise price.-customer loyalty
Targets mass market
Pros of penetrative pricing
Works beT with new products
Useful when price very elastic.
Cons of penetrative pricing
Consumer may of brought anyway even without loe prics
Psychological pricing is
Little lower below a round figure such as 19.99
Physiological pricing pro
Ideal for products that want to protect premium image
Cons psychological pricing
High risk if comparable prods are available for lower prices
