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Flashcards in Semi-Finals Deck (29)
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1
Q

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.

A

Pricing

2
Q

They are the variable cost for the organization.

A

The remaining 3p’s

3
Q

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

A

Pricing

4
Q

It must support these elements of the mix.

A

Price

5
Q

It is difficult and must reflect supply and demand relationship.

A

Pricing

6
Q

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

A

loss of sales

7
Q

Pricing should take into account the following factors:

A
Fixed and variable costs
Competition
Company objectives
Proposed positioning strategies.
Target group and willingness to pay.
8
Q

DIFFERENT KINDS OF PRICING SCHEMES

A
Penetration Pricing
Optional Pricing
Skimming Pricing
Competition Pricing
Product Line Pricing
Bundle Pricing
Psychological Pricing
Premium Pricing
Cost-Based Pricing
Cost-Plus Pricing
9
Q

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.

A

Penetration Pricing

10
Q

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

A

Penetration Pricing

11
Q

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.

A

Skimming Pricing

12
Q

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.

A

Skimming Pricing

13
Q

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.

A

Competition pricing

14
Q

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

A

Competition Pricing

15
Q

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

A

Product Line Pricing

16
Q

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.

A

Product Line Pricing

17
Q

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.

A

Bundle Pricing

18
Q

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

A

Bundle Pricing

19
Q

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

A

Psychological pricing

20
Q

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.

A

Psychological Pricing

21
Q

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

A

Premium pricing

22
Q

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

A

Premium Pricing

23
Q

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

A

Optional pricing

24
Q

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

A

Optional Pricing

25
Q

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.

A

Cost Based Pricing

26
Q

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.

A

Cost-based Pricing

27
Q

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

A

Cost Plus Pricing

28
Q

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

A

Cost-Plus Pricing

29
Q

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

A

Price