seven Ps- pricing

Question 1

what is price skimming

Answer 1

a high price is set to to yield a high profit margin

Question 2

what is penetration pricing

Answer 2

-low prices are set to break into a market or achieve a high market share

Question 3

what’s 2 advantages of price skimming

Answer 3

-appeal to early adopters
-long term- can appeal to more exclusive upscale market

Question 4

disadvantage of price skimming

Answer 4

hard in competitive markets as people look for cheaper alternatives

Question 5

what is dynamic pricing

Answer 5

flexible pricing based on the market , can change pricing depending on customer willingness to pay or according to changes in supply or demand

Question 6

what is a price war

Answer 6

rival companies undercut each others price to increase sales volume, however reduces profit margin

Question 7

what is predatory pricing

Answer 7

firms set very low pricing to drive other firms out the market

Question 8

what are loss leaders

Answer 8

firms set low prices for certain products to encourage customers to buy more fully priced products

Question 9

what is psychological pricing

Answer 9

-giev an impression of value, by making products sound cheaper than they are eg: £3.99 instead of £4