Tesco uses competitive pricing (appendix 2.1) to tempt customers for other businesses. Competitive pricing is when someone sets the price of a product based on what the competitors are charging. It is mainly used by businesses selling similar products. This shows that Tesco researches its competitors’ prices for a certain product and they put a price on their product, which either matches it or is lower than their competitors’. This is also shown by their use of the price comparison page (appendix 2.1). This shows their customers that they are the best, therefore, helping them attract more customers, which may lead into a sales boost. The advantage of competitive pricing is that you can tempt other competitor’s customers. However, the disadvantage of competitive pricing is that businesses may have to attract the customers in other ways if this pricing strategy will not grab the customers’ attention. Another pricing strategy Tesco does is a loss leader. A loss leader is when a certain product is below the cost price and, therefore, it is making a loss on that product. An advantage of Tesco doing this is that it will attract customers to buy these products along with other products that are not making a loss. However, Tesco could be in trouble if the customers keep on buying the loss leader products. Also, Tesco has the finest range store (appendix 2.2) which is similar to price penetration, where they target high-income segments. They increase their price because they know the customer will buy, as they perceive the product to be of high quality. Tesco Everyday value (appendix 2.3) is a pricing strategy that they used to target lower class people. They decrease the price because they know lower income customers will be able to afford
Tesco uses competitive pricing (appendix 2.1) to tempt customers for other businesses. Competitive pricing is when someone sets the price of a product based on what the competitors are charging. It is mainly used by businesses selling similar products. This shows that Tesco researches its competitors’ prices for a certain product and they put a price on their product, which either matches it or is lower than their competitors’. This is also shown by their use of the price comparison page (appendix 2.1). This shows their customers that they are the best, therefore, helping them attract more customers, which may lead into a sales boost. The advantage of competitive pricing is that you can tempt other competitor’s customers. However, the disadvantage of competitive pricing is that businesses may have to attract the customers in other ways if this pricing strategy will not grab the customers’ attention. Another pricing strategy Tesco does is a loss leader. A loss leader is when a certain product is below the cost price and, therefore, it is making a loss on that product. An advantage of Tesco doing this is that it will attract customers to buy these products along with other products that are not making a loss. However, Tesco could be in trouble if the customers keep on buying the loss leader products. Also, Tesco has the finest range store (appendix 2.2) which is similar to price penetration, where they target high-income segments. They increase their price because they know the customer will buy, as they perceive the product to be of high quality. Tesco Everyday value (appendix 2.3) is a pricing strategy that they used to target lower class people. They decrease the price because they know lower income customers will be able to afford