total costs/number of units = unit costs. working out the production costs then adding up how much profit the company wants
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What is price skimming?
Setting a higher price when entering the market with a new product. Used when there is no competition
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What is penetration?
The price is set lower to gain market share. Used when launching a product into a market where there are similar products
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What is competitive?
Price is set at the market level. Happens in highly competitive markets
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What is predatory?
Pricing low enough to drive out rivals
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What is psychological?
Businesses believe there are certain price barriers that consumers won't cross
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What are the factors that determine the most appropriate pricing strategy?
Amount of differentiation, price elasticity of demand, level of competition, strength of brand, stage in the product life cycle, costs and amount of profit wanted
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What are the different types of distribution channels?
Traditional, direct to retailer, be your own retailer, direct online, online retail
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What are product based extension strategies?
Relaunch with a new design, new products which claim to have health giving properties, new products which are new and original
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What are promotion based extension strategies?
Targeting a new segment of the market, developing new uses for the product, increasing the usage of the product
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What is a product portfolio?
they examine the existing position of a firm's products. This allows the firm to consider its existing position and what to do next
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What is the Boston Matrix?
Shows the market share of each of the firm's products and the rate of growth of the markets they operate in
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What are the 4 parts of the Boston Matrix?
Cash cow (high share in a slow growth market). Problem child (low share of a fast growing market). Rising star (high share of a growing market). Dogs (low share of a declining market)
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If a brand succeeds in the mass markets it can enjoy what?
Distribution levels close to 100%, control over promotion, control over pricing
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Other cards in this set
Card 2
Front
What can change in the mix to reflect social trends?
Back
Concerns over resource depletion, waste minimisation and re-use, recycling, ethical sourcing
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