Pricing
- Created by: Bendean3
- Created on: 02-04-15 13:49
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- Pricing
- Pricing Strategies
- Price Skimming
- When a company sets the price of a product high
- To achieve high profit margins.
- It is used during the introduction period of a product
- For market objectives such as maximising value added
- When a company sets the price of a product high
- Penetration Pricing
- Low prices set to break into a market or a spurt in market share
- It is often used when products are first released to gain new customers
- Objective is To increase market share and maximise sales volume (not value)
- Price leadership
- This is when large companies in a market sets a price
- They often have the largest market share.
- Objective is to maintain market share and stability
- Price Taking
- These are the smaller firms that tend to follow prices set by large firms
- They do this becaus lower prices trigger 'price wars' and higher prices means loss of customers
- Objective is to maintain market share and stability
- Predator (Destroyer) Pricing
- They set very low prices to get other firms out of the market
- Objective is to reduce the number of competitors
- Price Skimming
- Pricing Tactics
- Loss Leadership
- When a firm sets a very low price for its product(s) to encourage consumers in order to buy other products that provide more of a profit
- Used by supermarkets most commonly
- Psychological pricing
- A tactic intended to give the impression of value
- Selling a good for £9.99 instead of £10
- A tactic intended to give the impression of value
- Loss Leadership
- Pricing Strategies
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