price-marketing

• What is the purpose of penetration pricing?

  To encourage sales with a low initial price
• What is a potential disadvantage of penetration pricing?

  Customers may not buy if prices rise
• What is price skimming?

  Selling at a high price for initial profits
• What is a disadvantage of price skimming?

  Some customers may not afford high prices
• How does cost plus pricing work?

  Adding profit to production costs for pricing
• What is a disadvantage of cost plus pricing?

  It may not work in competitive markets
• What is psychological pricing?

  Setting prices just below whole numbers
• What is a disadvantage of psychological pricing?

  Some customers may not be convinced to buy
• What is competitive pricing?

  Setting prices at or below competitors' prices
• What is a disadvantage of competitive pricing?

  Customers may not switch from rivals
• What is price discrimination?

  Charging different prices to different segments
• What is a disadvantage of price discrimination?

  Some customers may choose rival retailers
• What is a loss leader strategy?

  Products sold at a loss to attract customers
• What is a disadvantage of using a loss leader strategy?

  Customers may expect low prices long-term
• Why might a business charge higher prices?

  • Higher costs or better ingredients
  • Exclusive market targeting
  • Well-known quality brand
  • High marketing costs to recover
• What are the advantages of using pricing strategies?

  • Increases sales and revenue
  • Targets specific market segments
  • Reflects market conditions
  • Considers competitor actions
• What are the disadvantages of using pricing strategies?

  • Competitors may follow pricing strategies
  • Customers may not be attracted
  • Expensive advertising needed
  • Some segments may be unhappy