price is determined by adding a profit element on top of the cost of making the product.
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Customer-based pricing
where prices are determined by what a firm believes customers will be prepared to pay
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Competitor-based pricing
where competitor prices are the main influence on the price set
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Price skimming
setting a high price before other competitors come into the market.
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Loss leaders
product priced below cost-price in order to attract consumers into a shop or online store
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Predatory pricing
rices are deliberately set very low by a dominant competitor in the market in order to restrict or prevent competition
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Psychological pricing
make the customer believe the product is cheaper than it really is
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Penetration Pricing
The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased
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Economy Pricing
The costs of marketing and promoting a product are kept to a minimum
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Product Line Pricing
Where there is a range of products or services the pricing reflects the benefits of parts of the range.
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Optional Product Pricing
Companies will attempt to increase the amount customers spend once they start to buy
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Captive Product Pricing
where business set a low price for a product then make a pice really expensive where it can work without it
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Product Bundle Pricing
Here sellers combine several products in the same package. This also serves to move old stock. Blu-ray and videogames are often sold using the bundle approach once they reach the end of their product life cycle
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Promotional Pricing
Pricing to promote a product is a very common application
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Value Pricing
This approach is used where external factors such as recession or increased competition force companies to provide value products and services to retain sales
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Premium Pricing
Use a high price where there is a unique brand
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Other cards in this set
Card 2
Front
Customer-based pricing
Back
where prices are determined by what a firm believes customers will be prepared to pay
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