Topic 9 Pricing Flashcards Preview

Fundamentals of marketing > Topic 9 Pricing > Flashcards

Flashcards in Topic 9 Pricing Deck (9)
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1

What factors influence the price of a product?

1) Company factors e.g the available resources
2) Market factors e.g competition, consumer perception, distribution costs
3)Environmental factors e.g exchange rates

2

What is price elasticity of demand?

- Measures the effect of price change on demand

3

How do you calculate PED?

% change in quantity demanded divided by % change in price

4

What is the break even point?

- Point at which you are no longer making a loss nor are you making a profit

5

What are the three types of pricing?

1) Skimming
2)Penetration
3)Psychological

6

What is price skimming?

Prices are set high to attract the least price sensitive in the market
- Appeals to opinion leaders who want the product first regardless of price

7

Whats penetration pricing?

- Pricing aggressively below completion to attempt to gain a large market share
- Risky as may make people establish it with a poor brand image

8

What is psychological pricing ?

-Using numbers such as £1500 rather than pricing with a 99p at the end
- Selling in bundles
- Odd even pricing e.g £2.99 rather than £3

9

Whats price differentiation?

- Pricing differently at different distribution s