Price- Marketing Mix
- Created by: Hayley Barker
- Created on: 26-05-13 13:51
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- Price
- Factors Affecting price
- objectives pricing strategy chosen
- marketing mix complimets or other factors
- fixed and variable costs
- competition price of competitor products
- perceptions/exp ectations of what customers think its worth
- market segment- charge different for different markets
- legal constraints
- Pricing Strategies
- Cost plus pricing(mark up pricing) = calculation of average cost (AC) plus a mark up.
- AC=total cost/Output
- Contribution = prices set to ensure coerage of variable costs and a contribution to the fixewd costs
- contribution= selling price - variable costs
- Price Discrimination = charging a different price for the same good/service in different markets. Market must be impenetrable.
- Market/price Skimming = high price, low volume. skim profit from market, for products with short lifecycle or face competition.
- PsychologicalPricing = used to play on consumetr perceptions.
- Penetration Pricing = low price to secure high volume. Typical in mass market products(food). for products with an anticipated long lifecycle.
- Loss leading = goods/ services deliberately sold below cost to encourage sales elsewhere in business.
- Destroyer/ Predatory Procing = Deliberate price cutting offer of 'free gifts' to force rivals out of business or prevent new entrents. (illegal if can be proved)
- Value Pricing = prices set in accordance with customer perceptions about the value of service/product
- Tender Pricing = Firm submits price for carrying out the work. Purchaser then chooses which represents best value. Mostly done in secret.
- Cost plus pricing(mark up pricing) = calculation of average cost (AC) plus a mark up.
- Factors Affecting price
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