Semi-Finals

Question 1

It is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization.

Answer 1

Pricing

Question 2

They are the variable cost for the organization.

Answer 2

The remaining 3p’s

Question 3

It costs to produce and design a product; it costs to distribute a product and costs to promote it.

Answer 3

Pricing

Question 4

It must support these elements of the mix.

Answer 4

Price

Question 5

It is difficult and must reflect supply and demand relationship.

Answer 5

Pricing

Question 6

Pricing a product too high or too low could mean a ___ for the organization.

Answer 6

loss of sales

Question 7

Pricing should take into account the following factors:

Answer 7

Fixed and variable costs
Competition
Company objectives
Proposed positioning strategies.
Target group and willingness to pay.

Question 8

DIFFERENT KINDS OF PRICING SCHEMES

Answer 8

Penetration Pricing
Optional Pricing
Skimming Pricing
Competition Pricing
Product Line Pricing
Bundle Pricing
Psychological Pricing
Premium Pricing
Cost-Based Pricing
Cost-Plus Pricing

Question 9

Here the organization sets a low price to increase sales and market share. Once market share has been captured the firm may well then increase their price.
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Answer 9

Penetration Pricing

Question 10

Example: A television satellite company sets a low price to get subscribers then increases the price as their customer base increases.

Answer 10

Penetration Pricing

Question 11

The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.

Answer 11

Skimming Pricing

Question 12

Example: A games console company reduces the price of their console over 5 years, charging a premium at launch and lowest price near the end of its life cycle.

Answer 12

Skimming Pricing

Question 13

Setting a price in comparison with competitors. Really a firm has three options and these are to price lower, price the same or price higher.

Answer 13

Competition pricing

Question 14

Example: Some firms offer a price matching service to match what their competitors are offering.

Answer 14

Competition Pricing

Question 15

Pricing different products within the same product range at different price points.

Answer 15

Product Line Pricing

Question 16

Example: An example would be a DVD manufacturer offering different DVD recorders with different features at different prices eg A HD and non HD version. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.

Answer 16

Product Line Pricing

Question 17

The organization bundles a group of products at a reduced price. Common methods are buy one and get one free promotions or BOGOF’s as they are now known. Within the UK some firms are now moving into the realms of buy one get two free can we call this BOGTF.

Answer 17

Bundle Pricing

Question 18

Example This strategy is very popular with supermarkets who often offer BOGOF strategies.

Answer 18

Bundle Pricing

Question 19

The seller here will consider the psychology of price and the positioning of price within the market place.

Answer 19

Psychological pricing

Question 20

Example: The seller will therefore charge Php99 instead Php100 or Php199 instead of P200. The reason why this methods work, is because buyers will still say they purchased their product under Php200.

Answer 20

Psychological Pricing

Question 21

The price set is high to reflect the exclusiveness of the product.​

Answer 21

Premium pricing

Question 22

Example: Example of products using this strategy would be hermes, first class airline services, Porsche etc.

Answer 22

Premium Pricing

Question 23

The organization sells optional extras along with the product to maximize its turnover.

Answer 23

Optional pricing

Question 24

Example: This strategy is used commonly within the car industry as i found out when purchasing my car.

Answer 24

Optional Pricing

Question 25

The firms take into account the cost of production and distribution, they then decide on a mark up which they would like for profit to come to their final pricing decision.

Answer 25

Cost Based Pricing

Question 26

Example: If a firm operates in a very volatile industry, where costs are changing regularly no set price can be set, therefore the firm will decide on their mark up to confirm their pricing decision.

Answer 26

Cost-based Pricing

Question 27

Here the firm adds a percentage to costs as profit margin to come to their final pricing decisions.

Answer 27

Cost Plus Pricing

Question 28

Example: For example it may cost Php100 to produce a chocolate and the firm adds 20% as a profit margin so the selling price would be Ph120.00

Answer 28

Cost-Plus Pricing

Question 29

Anytime anything is sold, there must be a ___ involved.

Answer 29

Price