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22 Cards in this Set
- Front
- Back
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what is a description of Low price? |
the price charged is lower than the price charged by competitors |
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why would a business use low price? |
the product will be bought by customers because it is cheaper |
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What is a description of high price? |
The price charged is higher than the price charged by competitors. |
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Why would a business use high price?
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the product will be bought by customers because they think it is of a higher quality than competitors. |
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What is a description of promotional pricing?
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The price charged is lower than normal for a short period. |
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Why would a business use promotional pricing? |
The product will be bought by customers because it is on special offer and they think they are getting a deal. |
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What is a description of cost plus pricing? |
The cost of making the product will be calculated before a percentage is added on for profit |
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Why would a business use Cost plus pricing? |
this strategy ensures that the cost of making the product will be covered and that a profit is also made. |
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What is a description of psychological pricing? |
the price charged makes the customer think that the product is cheaper than it actually is. |
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Why would a business use psychological pricing? |
this method tricks people into thinking the product is cheaper than it actually is and attracts them to buy it. it attracts customers who buy on impulse. |
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what is a description of market skimming? |
A high price is charged for a new and often unique, with often little or no competition. the price might be decreased once competition arrives. |
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Why would a business use market skimming? |
A high price can be charged because little or no competition exists. a large profit can be made. |
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What is a description of premium pricing? |
High prices are charged |
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why would a business use premium pricing? |
the high price gives the product a unique and exclusive image. high profits can be made |
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what is a description of destroyer pricing? |
The price is set deliberately low |
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why would a business use destroyer pricing? |
this forces the competition out of the market so that they business can then charge higher prices at a later date |
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what is a description of loss leaders? |
The price charged is lower than the cost of making the product. |
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why would a business use loss leaders? |
attracts customers to buy. this then encourages customers to buy other products that are priced normally. profit is then made on the total amount of purchases the customer makes. |
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what is a description of penetration pricing? |
the product is introduced to the market at a low price which will then be increased once the product becomes known. |
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Why would a business use penetration pricing? |
encourages customers to buy the product. once customers are attracted the price can then be increased |
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what is a description of competitive pricing? |
pricing the product similar to competitors |
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Why would a business use competitive pricing? |
attracts customers and allows businesses to compete. |
