Transcript Price - GCSE Business Studies

PRICE
Topic 3.1
THE MARKETING MIX: PRICE
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Market price – where demand meets supply
Increases when demand increases
 Increases when supply falls
 Only useful for a limited range of products
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Cost plus pricing
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Calculate the unit cost taking into account all fixed and
variable costs and add on a mark-up for profit
Competitive pricing
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Look at competitors price and match or slightly undercut it.
THE MARKETING MIX: PRICE (CONTINUED)
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Loss leaders
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Selling at unit cost price or even below to tempt people to
come into the shop and buy it and other more profitable
items, used in supermarkets
Penetration pricing
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Used when entering an established market with a new
product. Initially sell at a very low price, then raise it when
the product is established
THE MARKETING MIX: PRICE (CONTINUED)
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Price skimming/creaming
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Price discrimination
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Used when making a technical product in a new market.
The price is initially high to recoup the research and
development cost, then lowered once sales increase.
Used by companies who can sell the same product at
different prices to different markets e.g. telephone charges
peak and off peak
Consumer led
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Producer has to sell at what the consumer deems to be an
appropriate price