3.3.4: Making marketing decisions: using the marketing mix (PRICE)

Question	Answer
Price: (Key Features)	-competitors products/price -cost of production, promotion etc. -market conditions (market share, demand etc.) -state of the economy -power of customers -location of business -brand image -brand loyalty -product quality -PED
Two Pricing Strategies For Initial Launch:	-Penetration pricing: where low prices are charged to help attract customers to gain a foothold in the market and establish market share e.g. new food products -Price skimming: high prices are charged to gain a high profit margin from early adopters. Mostly used when a business has a strong, established brand image already e.g. Apple
Early Adopters:	people who are willing to pay high prices to purchase products when they are first launched (common in technology markets)
Other Pricing Strategies/Methods:	-Loss leaders: a short term tactic where firms set lower prices than usual to attract customers who they hope will buy other full priced products e..g. mobile phone games -Psychological pricing: prices are set to appear lower to the consumer e.g. £9.99 rather than £10 -Price discrimination: higher prices are charged to some customers for the same product/service e.g. train fares (age) -Cost-plus pricing: the average cost of producing a product plus a sum to ensure profit is made e.g. petrol -Mark-up: the percentage added to a product to ensure a profit is made

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	Created by Ashleigh-Jade Jones about 7 years ago