AS Plc Price changes

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  • Factors that influence the price that AS Plc charge for their cars
    • Cost
      • In order for AS Plc to make a profit, they must sell cars at a price  that more than covers its total costs.
    • Customer Perceptions
      • Because AS Plc only produce a limited number of cars they are seen as 'special' and so customers are willing to pay a higher price.
    • Customer Income
      • Customers income (from employment/ investment or other sources) directly affects their ability and willingness to pay for a product at any given price.
    • The nature of the product
      • AS Plc produce sports cars which are seen as 'special' and the more unique the product, the higher price it can be charged.
    • Promotion used
      • A higher price can be charged as branding through advertising can to differentiate the product from it's rivals, making it appear superior to others in the market place, even if the basic product is the same
    • Position in the product life cycles
      • A hgih price may be particularly appropriate as AS Plc's cars with the new engines are (at present) more fuel efficient than it's competitors, and some customers will  want to be at the forefront of owning a new product so will pay a higher price.
    • Wealth of other countries
      • If the country AS Plc sells to is wealthy, the people of the country will be able to afford to pay higher prices so AS Plc could increase the price of their cars for wealthy countries




This mind map is for a specific case study but is of good general use for students wanting to revise why a particular pricing strategy is picked.

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