The 4 P's- Price

Question 1

Price LEADERship

Answer 1

used for best-selling products/brands in a particular market

where customers perceive there to be few substitutes, hence the dominant firm CAN SET HIGH PRICES, become market leader

but it can be cheap products as well

Question 2

Price discrimination

Answer 2

charge customers different prices for the same product based on what the seller thinks the customer can agree to

think BARGAINING but in business formal context

Question 3

Loss leader

Answer 3

selling a PRODUCT below its cost value–> product=at a loss, but regain loss through other products

leader=without loss (experiment/risk) cannot make a gain

Question 4

Penetration滲透式 pricing

Answer 4

price is lower, but will GRADUALLY INCREASE

think penetration=滲透

Question 5

Predatory pricing

Answer 5

temporarily setting prices so low that rivals cannot compete at a profitable level

predatory–> more aggressive=hard to compete with

*illegal

Question 6

Price skimming

Answer 6

involves INITIALLY charging high prices for innovative/high-tech products. Price is reduced as the novelty wears off and as substitute products appear

Question 7

Price wars

Answer 7

businesses competing by a series of intensive price cuts to threaten the competitiveness of rival firms

Question 8

Psychological pricing

Answer 8

involves rounding down numbers to make prices seem lower