Flashcards
Pricing strategies and evaluation
Cards in this deck (8)
- 1Price pointsAll products are sold at certain predetermined prices.
- 2Advantage of Price pointsIt is simple for customers to choose, and is easy for businesses to set prices and to suggest that customers consider a higher priced model. (However, the profit margin on each product varies)
- 3Price skimmingA business starts out with a high price in the introduction stage so that those who want a product will buy it, then they lower it to attract more customers.
- 4Advantage of price skimmingIt will lead to higher profits for the business
- 5Price penetrationA business starts out with the lowest possible price in the establishment stage to attract customers, then raises its price once established.
- 6Advantage of price penetrationThe business will get more revenue as the customers hopefully will have enjoyed it enough to pay more.
- 7Loss leaderA product is sold below its cost price in order to attract people to to the business so that they will buy other more profitable products.
- 8Advantage of Loss leaderIt helps to clear out surplus stock or stock which is close to its use-by date.
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- Year 12 Economics and Business Flashcards on Pricing strategies and evaluation , created by Rory Coverdale on 13/03/2017.
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- Rory Coverdale
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