Pricing strategies (Edexcel GCSE Business): Flashcards
📚Flashcards
Practise the cards
12 cards from this deck
ShowHide
Practise the cards
12 cards from this deck
Margin strategy
Margin strategy
High profit margins by setting higher prices, fewer sales
Volume strategy
Volume strategy
Low profit margins, lower prices, high sales volumes
Trade-off in pricing strategies
Trade-off in pricing strategies
Higher margins = fewer sales; lower margins = more sales needed
High volume, low margin requires
High volume, low margin requires
Excellent cost control & infrastructure for large-scale ops
Low volume, high margin relies on
Low volume, high margin relies on
Product quality, brand strength, targeting premium segment
How technology influences pricing
How technology influences pricing
Reduces production costs, enables competitive pricing
How branding influences pricing
How branding influences pricing
Strong brands command higher prices due to perceived quality
Cost-plus pricing method
Cost-plus pricing method
Add profit margin target (e.g. 150%) to production costs
Market segmentation & pricing
Market segmentation & pricing
Different segments have different price sensitivities, allowing tailored pricing
Penetration pricing
Penetration pricing
Used by new products to gain market share
Example: high volume, low margin
Example: high volume, low margin
Tesco's value ranges - attract price-conscious customers
Example: low volume, high margin
Example: low volume, high margin
Rolls-Royce - focus on premium customers valuing exclusivity