Topic 9 Pricing Flashcards Preview

Fundamentals of marketing > Topic 9 Pricing > Flashcards

Flashcards in Topic 9 Pricing Deck (9)
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1
Q

What factors influence the price of a product?

A

1) Company factors e.g the available resources
2) Market factors e.g competition, consumer perception, distribution costs
3) Environmental factors e.g exchange rates

2
Q

What is price elasticity of demand?

A
  • Measures the effect of price change on demand
3
Q

How do you calculate PED?

A

% change in quantity demanded divided by % change in price

4
Q

What is the break even point?

A
  • Point at which you are no longer making a loss nor are you making a profit
5
Q

What are the three types of pricing?

A

1) Skimming
2) Penetration
3) Psychological

6
Q

What is price skimming?

A

Prices are set high to attract the least price sensitive in the market
- Appeals to opinion leaders who want the product first regardless of price

7
Q

Whats penetration pricing?

A
  • Pricing aggressively below completion to attempt to gain a large market share
  • Risky as may make people establish it with a poor brand image
8
Q

What is psychological pricing ?

A
  • Using numbers such as £1500 rather than pricing with a 99p at the end
  • Selling in bundles
  • Odd even pricing e.g £2.99 rather than £3
9
Q

Whats price differentiation?

A
  • Pricing differently at different distribution s