Upgrade to remove ads
Principles of Marketing 9
Terms in this set (18)
What is pricing strategies?
This is an alternative method of deciding the best price to change for a product or service
Focus on cost is possible when?
The customer considers aspects such as skill and expertise such as carpentry, this mean tradesmen can take this and their materials
Why focus on the market?
When its a competitive market and you want to attract customers from your rivals
Why is pricing so important?
To low and you will struggle to make a profit, too high and customers may go elsewhere
What is cost plus pricing?
How much the product costs to make then add on a percentage profit
What is mark up pricing?
How much the product costs to make and add on a percentage mark -up
What is competitive pricing?
Normally the price that the competitors are charging
This is a going rate for a product that customers will compare like eggs and milk
What is meant by skimming?
Start the price high to take advantage of the novelty value, if its something rather different or techy
What is penetration pricing
Ask a low price at the start to gather interst
What is premium pricing
Ask a high price for luxury item that consumers will get status or prestige for owning
What is meant by Elasticity of demand?
The degree to which demand and sales increases as prices fall and vice versa
What is meant by essential items?
items we need to buy no matter what such as fuel, food and so inelastic because demand does not change even when prices change
What a re non essential items
These items are more elastic because demand falls more quickly if prices increase ie cars, chocolate and Televisions, this is because you can do without or buy an alterantive
PED is = to
%change in quality demanded / %change in price
If you are given different selling prices or quantities then you must be able to calculate the percentage difference ie...
e.g £10 to £12 divide the difference by the lower figure then x 100 = 2/10 x 100=20%
So would would the calculation be to work out a fall in price....
e.g. 200 sales fall to 150 divide the difference by the higher figure then x 100 = 50/200 x 100 = 25%
What about the elasticity of luxury goods?
These are usually an exception to the law of demand as when prices rise customers still want to pay because of ownership status or kudos
YOU MIGHT ALSO LIKE...
Marketing Chapter 11
Marketing 3010: Chapter 14 - Pricing Concepts for…
OTHER SETS BY THIS CREATOR
Principles of marketing 11
Principles of marketing 10
Principles of marketing 8
Products from oil