Price (AQA GCSE Business): Flashcards
📚Flashcards
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Practise the cards
15 cards from this deck
What are the 4Ps of the marketing mix?
What are the 4Ps of the marketing mix?
Product, Price, Place, Promotion
What is cost-plus pricing?
What is cost-plus pricing?
Adding set amount/% to cost of producing/purchasing product
Main benefit of cost-plus pricing
Main benefit of cost-plus pricing
Simplicity - easy to calculate and guarantees profit
What is penetration pricing?
What is penetration pricing?
Low initial price to encourage customers to try new product
When is penetration pricing effective?
When is penetration pricing effective?
Launching in markets where similar items already exist
What is price skimming?
What is price skimming?
High initial price before competitors enter the market
Main advantage of price skimming
Main advantage of price skimming
Recover R&D costs quickly and generate high profits early
What are loss leaders?
What are loss leaders?
Products priced below cost to attract customers to shop
Purpose of loss leaders
Purpose of loss leaders
Encourage purchases of other profitable items
What is competitive pricing?
What is competitive pricing?
Setting prices similar to what rivals charge
Why do businesses use competitive pricing?
Why do businesses use competitive pricing?
Market forces of supply & demand determine price level
How do business objectives affect pricing?
How do business objectives affect pricing?
High price/quality vs low margin/high sales strategies differ
How does product lifecycle affect pricing?
How does product lifecycle affect pricing?
Decline phase needs lower prices than launch/high demand phase
How do market conditions affect pricing?
How do market conditions affect pricing?
High demand, low supply = higher prices; oversupply = lower
Effect of increasing price on demand
Effect of increasing price on demand
Typically sell fewer units as customers unable/unwilling to pay