Pricing Strategy
- Created by: Gaynor
- Created on: 06-03-18 16:02
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- Pricing Strategy
- Cost Plus
- A cost-based method for setting the prices of products
- It is done by calculating the percentage for the profit of the product to come to an overall price
- The business knows how much profit they are going to make off each product
- The price may be too expensive for some customers
- Penetration
- usually used by newer businesses
- It attracts attention to the product if it is rather cheap
- Only short term
- Skimming
- A price that is set as high as customers would be willing to pay
- It allows the business to make as much money as they can, as the customers will be willing to pay it
- Some customers may not be able to pay the higher price.
- Differential
- Charging prices to certain customers for the same product
- The business would be able to make more money from the richer customers as they can afford and would be willing to pay the extra price
- It may not work
- Promotional
- The products will be sold faster as more customers would buy them at a lower cost
- May loose profit
- Psychological
- Setting a price that makes the product look cheaper than it is
- The customer would think that the product is cheaper so they would be more likely to buy it
- People may not fall for it
- Cost Plus
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