business = pricing

Pricing tactics - Define MARKET SKIMMING?
Involves charging a high price for a new product for a limited time.
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Pricing tactics - What is the aim of MARKET SKIMMING?
To gain as much profit as possible for the new product whilst it remains unique to the market.
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Pricing tactics - What is MARKET SKIMMING targeted at?
targets the most profitable segments of the market before it is sold to a wider market at a lower price.
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Pricing tactics- Define LOSS LEADERS?
These products are priced very low in order to attract customers. The price is set lower than the price of producing it, so the company makes a loss on each product sold.
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Pricing tactics - Why would a business use LOSS LEADER method?
They use this pricing as they expect the losses to be more than compensated for by extra profits on other products.
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Pricing strategies - Psychological pricing - Define?
takes upon the psychological effect of their prices upon customers.
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Pricing strategies - Psychological pricing - What is the method?
lower prices slightly (usually lower than a rounded figure eg. 99p) such slightly lower prices suggests that customers will be looking for value for money.
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Pricing strategies - Define the three aspects of COMPETITION BASED PRICING?
Going rate pricing / Destroyer based pricing / Closed bid pricing.
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Pricing strategies - GRP - Define going rate pricing?
occurs in markets when businesses are reluctant to set off a price war by lowering their prices and are concerned about a fall in revenue. They examine their competitors prices and choose a price broadly inline with it.
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Pricing strategies - DBP - Define destroyer based pricing ?
Destroyer based pricing aims to eliminate rivals through cutting prices for a period of time long enough for the competition to go out of business.
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Pricing strategies - CBP - Define closed bid pricing?
This method of pricing occurs when firms have to tender a bid for work, which they are going to carry out.
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Define PRICE ELASTICITY OF DEMAND?
this measures the responsiveness of demand to changes in price.
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What does PRICE ELASTICITY OF DEMAND have an effect on?
It has an effect upon total revenue.
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Define INCOME ELASTICITY OF DEMAND?
This measures the responsiveness of demand to changes in income.
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what does INCOME ELASTICITY OF DEMAND effect?
Total revenue.
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Other cards in this set

Card 2

Front

Pricing tactics - What is the aim of MARKET SKIMMING?

Back

To gain as much profit as possible for the new product whilst it remains unique to the market.

Card 3

Front

Pricing tactics - What is MARKET SKIMMING targeted at?

Back

Preview of the front of card 3

Card 4

Front

Pricing tactics- Define LOSS LEADERS?

Back

Preview of the front of card 4

Card 5

Front

Pricing tactics - Why would a business use LOSS LEADER method?

Back

Preview of the front of card 5
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