Price Flashcards
What is the difference between Price-Takers and Price-Makers
The market mechanism sets a price and a predetermined quantity to supply(have to accept )(Perfect competition)
Sets pricing
Market-orientated(Buyers willing to pay) / Cost-Based Strats(suppliers willing to sell)
What factors affect pricing ?
Type of product
Product range
Economic issues
Level of competition
Financial strength (EOS)
What is Price skimming?
Charging a high price (USP) for a limited period of time.
Take advantage of the newness gain as much revenue
Generate revenue in a short period
What is Penetration Pricing ?
Charging a low price so that consumers and retailers buy in bulk
Brand loyalty
Low quality
what is Loss leader pricing ?
Selling a product at a loss to generate further sales in another product
Milk+Bread
what is Destroyer/Predator Pricing ?
Selling products a low price to drive competitors out off the market
Tesco (Apples)
what is competitive based pricing ?
Selling products at current market pricing (Price takers)
What is psychological pricing ?
Selling products that matches what consumers may expect to pay
£1499
What is cost-plus pricing ?
Adding a profit percentage to average cost of production
Changes in cost (Lead to happier customers)
Sold at profit
Competitors ignored
No currency exchange
What is contribution pricing?
Selling goods based on the variable cost plus a contribution towards overheads and profit
What is Full-cost pricing ?
Selling goods including Fixed costs and contribution and overheads and profits.
Pros and cons of using Pricing strategies ?
Increase sales,Increase Revenue , Increase Profit
Price discrimination
Competitive pricing
Expensive advertising to promote pricing Strat
Some segments may not be happy getting charged high prices (Gym)
