Chapter 7: Price as part of marketing mix:

Discount pricing

________: when products have not sold in sufficient quantity or when a product reaches close to expiry date.

Seasonality

________: products offered in high season tend to be more expensive than those offered at off- peak times.

Surcharges

________ can be defined as hidden costs within the industry.

Market penetration

________: usually used in the introduction phase.

impression of goods

It gives customers the ________ being cheap and entices them to spend on other more profitable and linked items at the same time, thus benefiting the organisation.

Market skimming

________: usually used in the introduction phase.

Profitability

________: this means that ________- seeking organisations operating within the private sector will take a much different approach in determining price policy to use compared with those organisations financed through public sources, as they need to make revenue.

Competitors

________: if no substitute products are available, a higher price can be set.

Taxation

________ can be seen as the opposite of subsidy, this is done to change the behaviour of organisations.

loss leader

A(n) ________ is a product that is sold at little or no profit, or even at a loss.

Loss leader pricing

________: usually used in the decline stage.

Price

term used to describe how much a customer actually paste receive the product or service upon purchase

Market penetration

usually used in the introduction phase

Market skimming

usually used in the introduction phase

Discount pricing

when products have not sold in sufficient quantity or when a product reaches close to expiry date

Variable pricing

this pricing takes into account the variability of demand

High prices are charged during the peak season

when demand is high

Loss leader pricing

usually used in the decline stage

Special offers

a form of promotional pricing

The going rate/competitive pricing

where there is a high degree of similarity between products offered by different organisation, the price may be determined by the going rate

Prestige pricing

usually used in the introduction stage

Price bundling

also known as product-bundle pricing, this involves pricing a few items of related products into a single bundle

Fixed and variable costs

these referred to all the expenses a business place to buy or to produce its products or services

Profitability

this means that profit-seeking organisations operating within the private sector will take a much different approach in determining price policy to use compared with those organisations financed through public sources, as they need to make revenue

Subsidies, taxation and surcharges

a subsidy is essentially a simple idea or an incentive to work with, the benefit of this to the customer is a reduction in price

Competitors

if no substitute products are available, a higher price can be set

Customer expectation/likely number of customers

price and quality perceptions are closely linked

Seasonality

products offered in high season tend to be more expensive than those offered at off-peak times

Economic factors

the state of the global economy has an impact on the price being paid

Market penetration

Usually used in the introduction phase. When launching a new product into a very competitive market, low prices are used to entice customers to try the product. This is also known as trial pricing. The aim is to win a large customer base and generate revenue quickly.

Market skimming

Usually used in the introduction phase. It allows the provider to charge a higher price, attracting customers who are comfortable with spending alot. Competitors will then enter the market, forcing the price down and making the product more affordable for a wider range of customers.

Variable pricing

This pricing takes into account the variability of demand. Different prices maybe set for different seasons of the year. High prices are charged during the peak season: when demand is high. Low prices are charged during low season, when demand is low.

Loss leader pricing

Usually used in the decline stage. A loss leader is a product that is sold at little or no profit, or even at a loss. It gives customers the impression of goods being cheap and entices them to spend on other more profitable and linked items at the same time.

Special offers

A form of promotional pricing. This policy is sometimes used as a form of competitor based pricing, to pull customers away from a rival attraction.

The going rate/competitive pricing

Where there is a high degree of similarity between products offered by different organisation, the price may be determined by the going rate.

Prestige pricing

Usually used in the introduction stage. Where products have an exclusive appeal or are of an exceptional quality, high prices are often set based on the assumption that people will associate high prices with high quality.

Price bundling

Also known as product-bundle pricing, this involves pricing a few items of related products into a single bundle.

Factors that determine pricing policies

Fixed and variable costs, Profitability, Subsidies taxation and surcharges, Competitors, Customer expectation, Seasonality, Economic factors