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Pricing Strategy
The pricing policies or methods used by a business to decide what to charge for its products.
Cost Plus Pricing
A pricing strategy that ensures all costs are covered by adding a markup to the unit cost.
Price Skimming
Setting a high price for a new product initially and lowering it over time to maximize revenue before competition emerges.
Penetration Pricing
Setting a low price for a new product temporarily to establish a market position and encourage initial customer purchases.
Predatory Pricing
Setting a price so low that it forces competitors out of business, often considered illegal.
Competitive Pricing
Charging prices similar to what rivals are charging in a competitive market.
Psychological Pricing
psychological pricing involves tactics that are designed to appeal to a customers emotional response to price by setting the price slightly below a rounded figure
Loss Leader Pricing
Setting a low price for a product to attract customers, hoping they will purchase other, higher-margin products.
Differentiation and USP
A unique selling proposition allows a business to charge higher prices for a distinct product compared to rivals.
Price Elasticity of Demand
Describes how the quantity demanded of a product responds to changes in price; inelastic demand allows for higher prices.
Stage of Product Life Cycle
the different stages a product passes through , such as the introduction, growth, maturity, or decline stage.
Markup
The amount added to the cost price of goods to cover overheads and profit.
Unit Cost
The average cost of producing one unit of a product, calculated as total cost divided by output.
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