Business Learning Outcome 4

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  • Created by: RHunwicke
  • Created on: 10-01-22 16:24
What Factors do Businesses Consider when Setting a Price for a new Product?
-Income levels of the target audience
-How much target customers are willing to pay for products
-The price competitors are charging for similar products
-The amount products cost to produce
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Why is it important for businesses to consider factors before setting a price?
If they didn't prices could be set too high as they haven't considered what customers are willing to pay-meaning the business could lose sales.
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Name 6 advertising methods?
-Leaflets
-Social media
-Websites
-Newspapers
-Magazines
-Radio
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Why do businesses use leaflets?
They are cheap to make and be kept by customers if needed.
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Why do businesses use social media?
They are cheap to advertise and accounts are free to create. It is possible to target adverts and specific people.
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Why do businesses use websites?
Customers often visit a businesses website for information about the products they sell
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Why do businesses use newspapers?
It can be expensive but gets a large audience. Its difficult to target it at specific groups of people.
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Why do businesses use magazines?
It can be expensive but is really easy to target a certain market as magazines are based on specific topics.
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Why do businesses use radio?
It is the most expensive method but adverts can grab people attention with sound/music but can't keep any information or might miss parts.
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What is a price strategy?
A pricing strategy is a specific system used to set prices.
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What are the four pricing strategies?
-Competitive pricing
-Psychological pricing
-Price skimming
-Price penetration
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What is competitive pricing?
Its when a business looks at what competitors are charging when considering there price
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What is psychological pricing?
When businesses avoid using round numbers for their prices instead using prices like 99p.
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What is price skimming?
Its when a business charge a high price for a new product or service because people are willing to pay for it as its new and then after this the price is lowered overtime as the product becomes more common.
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What is price penetration?
Its when businesses charge a low price when a product or service is first launched and then increase price overtime. This encourages customers to give it a chance with the hope they'll but it again
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What are examples of promotion techniques?
-Discounts
-Competitions
-Buy one get one free
-Free gifts/Product trials
-Loyalty schemes
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How do discounts help attract customers?
These are appropriate for all products or services.
They help businesses attract customers who will buy cause of a lowered price and can encourage if lowered again.
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How do competitions help attract customers?
They encourage people to interact with the brand which can attract new customers.
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How do buy one get one free's help attract customers?
These are more suited to products not services and to products that are consumed (used a lot).
Its where if you purchase one you get another free.
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How does free gifts/product trials help attract customers?
These are normally for new products so customers can test them out.
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How do loyalty schemes help attract customers?
This is used for products that customers consume a lot or buy regularly. These schemes are mainly used to retain customers as their loyalty will be rewarded with discounts.
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What is customer service?
Customer service is when a business provides assistance, support or advice to the people that are buying their products or services. Good customer service will mean people are happy to return, therefore retaining customers. It can also lead to a good r
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How does product knowledge help retain customers?
They can demonstrate good knowledge of the products they are
selling and pass their advice on to their customers. This can attract new customers, who often
have questions about their potential purchase. This can also help retain customers as, once they
un
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How does customer engagement help retain customers?
A business’s employees need to be polite, courteous and professional
when dealing with customers in store. Getting this right could
encourage customers to return or bring new customers in
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How does after sales service help retain customers?
Businesses could offer a
guarantee on products purchased, free repairs or a free helpline should the customer need
further support after their purchase has been made. All of these services can help retain existing
customers and can be the reason a new cus
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Other cards in this set

Card 2

Front

Why is it important for businesses to consider factors before setting a price?

Back

If they didn't prices could be set too high as they haven't considered what customers are willing to pay-meaning the business could lose sales.

Card 3

Front

Name 6 advertising methods?

Back

Preview of the front of card 3

Card 4

Front

Why do businesses use leaflets?

Back

Preview of the front of card 4

Card 5

Front

Why do businesses use social media?

Back

Preview of the front of card 5
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