business theme 2 - pricing strategies

margin strategy

setting a price that achieves a high profit margin

volume strategy

setting a price with a low profit margin which requires high sales volume in order to be profitable

influences - technology

new technology can lower the costs of production and allow a business to set a more competitive price

influences - branding

products with a strong brand can demand a higher price due to the perceived value and desirability

influence - costs

business may set itself a profit margin target that it adds to the cost of the product or service in order to set its price

influence - product life cycle

the products stage in the life cycle influences pricing decisions

influence - market segment

different prices may be applied to customers with different characteristics

influence - competition

a business has to consider its competitors and the position of its brand in the market