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  • 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
      • 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
    • 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


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