Pricing Strategies

• What is the definition of markup in pricing strategy?

  The difference between selling price and cost
• What are the types of pricing strategies?

  • Cost plus pricing
  • Price skimming
  • Price penetration
  • Competitive pricing
  • Psychological pricing
  • Price discrimination
  • Premium pricing
  • Loss leaders
• How does cost plus pricing work?

  Calculate total cost and add a markup
• What is price skimming?

  Setting high initial prices for new products
• What is price penetration?

  Setting a low initial price to attract customers
• What is a potential disadvantage of price skimming?

  High prices may reduce demand over time
• What is the advantage of cost plus pricing?

  It covers the cost of production easily
• What is a disadvantage of cost plus pricing?

  It could be priced too high for consumers
• What is predatory pricing?

  Selling at a low price to eliminate competition
• What is a disadvantage of predatory pricing?

  It can be considered unethical and illegal
• What is competitive pricing?

  Matching or undercutting competitors' prices
• What is a disadvantage of competitive pricing?

  It will reduce profit margins per unit
• What is psychological pricing?

  Setting prices to make them appear lower
• What is price discrimination?

  Charging different prices to different customers
• What is premium pricing?

  Selling at a high price for exclusivity
• What are loss leaders?

  Products sold at a loss to attract customers
• How do loss leaders work in a pricing strategy?

  They attract customers to buy complementary goods
• What is a key term related to pricing strategies?

  Dynamic
• How does the target market influence pricing strategies?

  It determines the acceptable price range
• What role does brand image play in pricing strategies?

  It affects perceived value and pricing
• How does the product life cycle stage impact pricing strategies?

  It influences pricing based on market maturity