Pricing

Front

Which statement best describes "Price"?

Back

The amount customers are charged for items

Front

What is price skimming?

Back

An initially high price charged to customer which will reduce over time

Front

What is Loss Leader pricing?

Back

A product is sold at less than cost price.

Front

What is an advantage of price skimming?

Back

Allows an organisation to make the largest profit possible

Front

What is Promotional pricing?

Back

When a business offers a short term special offer such as buy one get one free to gain interest and increase sales

Front

What is the selling price of an item which costs $5 to make and has a 50% mark up (profit added)?

Back

$7.50

Front

What is meant by Psychological pricing strategy?

Back

Items are offered at an uneven number to appear cheaper encouraging sales (eg $9.99)

Front

What is the aim of Loss Leader pricing strategy?

Back

To attract new and existing customers and increase sales of other items

Front

Can prices be set too low?

Back

Yes, customers may feel quality is too low.

Front

Sellers must carefully set prices so that buyers feel they are receiving __________ value for their money.

Back

optimum