Pricing Strategies

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  • Created by: izzy
  • Created on: 29-06-12 22:07

Pentration Pricing

This is when a firm changes a low price in order to penetrate the market, usually with a new product.

E.g. The first edition of a magazine may be cheaper to get people to read on and buy firther issues.

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Skimming / Creaming

When a firm charges a very high price, usually on a new product, because of novalty value or because there is no competition.

E.g. When a new computer game comes out avid fans will want it even when it's more expensive.

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Cost-Plus Pricing

A firm adds up the cost of what product costs to make, then adds a certain percent on to the price.

Psychological Pricing

£9.99 is used instead of £10 to make products seem cheaper.

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Promotional Pricing

A special price is charged to attract new customers or an old product or to sell off old products - like in a sale.


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Differential Pricing

This is when a firm charges different prices for the same products to different customers or at different times.

E.g. Electricity is cheaper at night.

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Loss Leaders

A product sold at a loss making price in order to encourage customers to buy other products from the business.

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Capture Pricing

A firm charges a low price to attract you to buy something but the refills or extras are much more expensive.

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