Cards (6)

  • What is price?
    The money charged for a product or service
    Everything that a customer has to give up in order to acquire a product or service
    Usally expressed in terms of £
  • What are the stages of price setting?
    develop pricing objectives ➡️ assess a target markets ability to purchase ➡️ determine demand for product ➡️ analyse demand, cost and profit relationship ➡️ evaluate competitors prices ➡️ select pricing stratagy and tactics ➡️ decide on price
  • What is cost plus pricing?
    • very simple pricing strategy
    • decide where you decide how much extra you will charge for the item over the cost
  • What is price skimming?
    • A relatively high price is charges when a product is first launched
    • Top segment is skimmed off first with the highest price
    • Price skimming is most appropriate when demand is inelastic
  • What is penetration pricing?
    • When a business charges a low price to gain market share
    • Most suitable when demand is sensitive to price (price elastic)
    • A low price can gain high sales and enable the business to benefit from producing on a large scale
  • What is dynamic pricing?
    • Occurs when prices are changing rapidly in response to changing demand consitions
    • Examples; oil, taxis, stock exchange or panic buying