Flashcards in Marketing- Pricing Deck (12)
What is price?
This is how much consumers will be charged for the product.
The price will affect the buying decisions of the customers so it is important to chose the right price at the right time for each group of customers
Name 3 long term pricing strategies
High/ premium price
Market/ competitive price
Name 4 short term pricing strategies
Describe premium pricing, is it short or long term?
Price is set higher than competitors to give the image of quality and exclusiveness
The product has to appeal to consumers looking for a particular image
Describe low price pricing, is it short or long term?
The price is set lower than competitors to attract customers to the product
Used for value for money products
Describe market/ competitive pricing, is it short or long term?
Price is set at the same level of competitors
Normally used for products that are identical
Other elements of the marketing mix are used to compete
Describe skimming pricing, is it short or long term?
The price is set high initially when no competition exists
When competitors enter the market the price is lowered to the market price
This is used when the product is new or unique
Describe penetration pricing, is it short or long term?
Price is set slightly lower than competitors to attract customers
Used to entice customers from other brands
Once a customer base has been created the price is slowly increased to the same as competitors
Describe promotional pricing, is it short or long term?
A low price is set for a short period of time to boost sales in the short term
Sometimes a loss can be made on the product
Describe destroyer pricing, is it short or long term?
Price is set very low compared to competitors
Once there is no competition in the market the price is then put back to the normal market level or higher
This is mainly used by large organisations to destroy competition
Name 3 alternative pricing strategies
Psychological pricing where the price appears lower than it really is e.g. £3.99
Cost plus pricing where price is set by adding a percentage to the cost of production
Discriminatory pricing where there business will charge different prices to different customers for basically the same thing e.g. Train tickets