Pricing Strategies

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Pricing Strategies

  • Cost Plus Pricing - Involves business working the cost of producing one unit of a product out and then adding a percentage for profit. Sometimes called mark-up pricing. It's simple to use, and ensures a profit's made. 
    I.E - if a product costs £6 and the mark-up's to be 200% then £12 will be added onto the cost, making the total price £18
  • Contribution Pricing -  Ensures that variable costs of production are met. Any extra will be a contribution to the company's fixed costs or overheads. For example, if the variable cost of producing a doll is £12 and its sale price is £25 then the contribution to overheads from each doll produced is £13.
  • Price Discrimination - This involves charging different prices to different groups of consumers for the same level…



Revision notes covering all the methods of pricing strategy. Provides useful examples to aid understanding and test yourself facility for checking knowledge.

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