Price Strategies Flashcards
(7 cards)
1
Q
Penetration Pricing
A
- Low initial price
- Aim of gaining market share
- Price rises after initial offer
2
Q
Price Skimming
A
- High initial price at product launch
- High demand for product
- USP/Competitive advantage
- Price reduces in line with demand
3
Q
Economy Pricing
A
- Product has low cost for the business
- Low sales price
- High sales volume
4
Q
Psychological Pricing
A
- £999 instead of £1000
- Left digit affect
- Appears cheaper but barely is
5
Q
Premium Pricing
A
- Competitive advantage
- High profit margins
- High price and demand
- High quality/luxury good
6
Q
Competitor Pricing
A
- ‘Going rate’
- Price based on competitors’
- Very common in competitive markets
7
Q
Cost Plus
A
- Product cost + profit margin = selling price
- E.g £200 + £50 = £250
- Uses minimal business resources
- Ignores market and competitors
