23 marketing_pricing_strategies

23 marketing_pricing_strategies - SKIMMING f If they are...

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tutor2u GCSE Business Studies Pricing - strategies There are several different pricing strategies available to a business: Strategy Description Cost-plus pricing Setting a price by adding a fixed amount or percentage to the cost of making the product Penetration pricing Setting a very low price to gain as many sales as possible Price skimming Setting a high price before other competitors come into the market Predatory pricing Setting a very low price to knock out all the other competition Competitor pricing Setting a price based on competitors prices Price discrimination Setting different prices for the same good, but to different markets e.g. peak and off peak mobile phone calls Psychological pricing Setting a price just below a large number to make it seem smaller e.g. £9.99 not £10 A new business that is entering the market might try the following strategies: f If they are first into the market then they might use price
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Unformatted text preview: SKIMMING. f If they are trying to establish themselves in the market then PENETRATION pricing. Sometimes a business may use a loss leader . This is a product where the price is so low that the retailer may not make any profit or even a loss on the sale, but does attract shoppers to buy other full price products. Orange juice has been used by businesses such as Rank Hovis McDougall to entice supermarkets to stock more of their other products. Price skimming has been used for the launch of high technology products, such as DVD players and Personal Digital Assistants (“PDA’s”) - which were far more expensive than they are now when they first arrived in the market. Key Links for GCSE Business Studies http://www.tutor2u.net/ Discussion Board for GCSE Business Studies Other GCSE Business Studies Revision Notes and Resources from tutor2u Tutor2u GCSE Business Online Store...
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