P1 Hw 11- Pricing Strategies

Question 1

Cost plus pricing

Answer 1

adding a certain % to the average total cost of the product

Question 2

Price skimming

Answer 2

charging a high initial price then lowering it gradually

Question 3

Penetration pricing

Answer 3

lower price than competitors then gradually increasing it

Question 4

Predatory pricing

Answer 4

set low prices to drive competitors out of the market

Question 5

Competitive pricing

Answer 5

charging similar prices to competitors

Question 6

Psychological pricing

Answer 6

make the price seem better by rounding down

Question 7

Product lifecycle

Answer 7

the stages a product goes through. R+D, growth, maturation ,decline

Question 8

Price comparison site

Answer 8

a website that compares different prices from similar products

Question 9

Mark-up

Answer 9

adding a certain amount to the price of the product to cover costs

Question 10

Profit margin

Answer 10

the amount by which the sales revenue exceeds the costs

Question 11

Price war

Answer 11

when competitors set prices lower than each other, forcing the prices extremely low