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.
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?
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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