1.3.3 pricing strategies

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12 Terms

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price
the amount of money that a customer has to pay to receive the good/service
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pricing strategies
cost plus, price skimming, penetration, predatory, competitive, psychological
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cost plus pricing
% markup of cost
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price skimming
setting high price then lowering
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penetration pricing
low price to gain advantage, then increase
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predatory pricing
low price to get rid of competitors, then set higher
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competitive pricing
prices are same or lower than competitors so compete based of marketing mix
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psychological pricing
setting prices so seems cheaper (3.99)
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price leaders
firms that dominate a market and set prices for existing products
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price takers
smaller firms that set their prices based on price in the market
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factors determining choice of pricing strategy
number of USPs, PED, level of competition, strength of a brand, stage in the product life cycle, costs and need to make a profit
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changes in pricing to reflect social trends
online sales have led to dynamic pricing, price comparison websites