Price

Question 1

what is effective about a decrease in price

Answer 1

makes the product more affordable and helps increase sale volume

Question 2

what is effective about an increase in price

Answer 2

it will promote an exclusive image and possibly increase profits

Question 3

what consequences can there be if the prices are chosen incorrectly

Answer 3

• loss of customers as the price is too high

- loss of revenues fewer customers means less sales

Question 4

what is a price strategy

Answer 4

it is your price compared to competitors set over long term

Question 5

what is a price tactic

Answer 5

it is a change in price in the short term, to influence demand

Question 6

what are long term pricing strategies

Answer 6

• low price is used in competition and sets price below rivals
• high price is used in competition and sets price above rival
• phsychological price strategy used as long term (£99 not £100)

Question 7

what are some short term pricing tactics

Answer 7

• skimming is a high price at launch then lowers
• penetration is low at launch then increase
• loss leader is very low price or deals to encourage retailers