Pricing strategies Market Skimming Penetration Pricing Competitive Pricing
100
What is pricing strategy?
A plan made by the company that establishes the initial price and any changes to pricing after that to help meet the marketing goals of a product
100
What is market skimming?
Its setting an initial high price for a product or a service before a competitor enters the market.
100
What is Penetration pricing?
Setting an initially low price for their new product or service to attract new consumers.
100
What is market share won by?
Battle for market share is won by advertising, promotion, distribution or unique product features.
200
What are the three types of pricing strategies?
Market skimming, penetration pricing, and competitive pricing are the three types of pricing strategies.
200
What is the purpose of market skimming?
The purpose of market skimming is that business can set a high price to try and reach the break even point quickly and recover its development costs.
200
When should Penetration pricing be used?
Penetration pricing should only be used when the variable costs of the product are low and one time development costs are high.
200
What is competitive pricing?
Businesses sell the same product to match or follow the price of other competitors.
300
What happens if the competitors enter the market?
If a business deos not recover its development cost before the competitors enters the market, the business could be at major competitive disadvantage.
300
What if the research is accurate?
If the research is accurate, the increased by the low launch price will recoup the development costs and the fixed costs through sheer volume of sales.
300
What you must do to make sure a store have competitive prices?
To ensure that there store have competitive prices, some retailers hire comparative shoppers, people who are paid to shop.
400
What is the weakness of market skimming?
A weakness of market skimming is that competitors can launch there products at lower prices than that charged by the original producers because the development cost are lower.
400
What makes the consumer buy the product instead of waiting?
The initial low price of the product will make consumers buy the product instead of waiting.
400
What you must do to build customer traffic?
To build customer traffic, retailers usually match prices on items the competition features in special clearance sales.






Chapter 7.3 Pricing Strategies

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