marketing mix - price

Question 1

what are the four main pricing approaches?

Answer 1

cost orientated
demand orientated
competitor orientated
value orientated

Question 1

what is cost -oriented pricing?

Answer 1

setting prices based on production costs plus a profit margin

Question 2

Define price skimming

Answer 2

setting a high initial price and gradually lowering it to attract different market segments

Question 3

what is first degree price discrimination?

Answer 3

charging a unique price to each customer based on their willingness to pay

Question 4

how does the decoy effect influence consumer purchasing?

Answer 4

it presents another option to make the other products more attractive by comparison

Question 5

what is the purpose of loss leader pricing?

Answer 5

to attract customers with a low priced product and encourage them to buy other higher margin products

Question 6

how do reference prices impact consumer perception?

Answer 6

consumers compare the current price to past prices, competitor prices or expected prices to assess value

Question 7

what is anchoring bias in pricing?

Answer 7

consumers rely on the first piece of price information they recieve when making a purchasing decision

Question 8

what is second degree price discrimination?

Answer 8

offering lower prices to customers who buy in bulk

Question 9

what is third degree price discrimination?

Answer 9

charging different prices to distinct customer groups based on demographics, location or purchasing behaviour