Topic 32 - Marketing Mix: Price

Question 1

What price strategy, for an existing product, can influence the rest of the markets products with its high market share?

Answer 1

Price leader

Question 2

Pricing tactics, what is a loss leader?

Answer 2

A product that is sold for less than it costs to make so that customers are encouraged to visit the shop or website and buy other products

Question 3

What is psychological pricing?

Answer 3

Prices that appear to be lower value than they really are. E.g: £5.99 instead of £6.00 x

Question 4

Give 4 influences on pricing decisions

Answer 4

Unit cost, the market, competitors, objectives, target market, PED, the rest of the marketing mix

Question 5

Define price elasticity of demand

Answer 5

The responsiveness of demand to a change in price of a product.

Question 6

What is the formula for PED?

Answer 6

Change in demand (%) / change in price (%)

If the result is greater than 1 = elastic
If the result is less than 1 = inelastic.

Question 7

What pricing strategy enters the market with a cheap price to gain a foothold?

Answer 7

Penetration pricing