Pricing

Which statement best describes "Price"?

• The cost of producing items

• The amount customers are charged for items

• The profit earned from selling items

What is price skimming?

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

• An initially low price charged to customer which will increase over time

• A steady price charged to customer regardless of product age

What is Loss Leader pricing?

• A product is sold at production cost price

• A product is sold at less than cost price

• A product is sold to make a small profit

What is an advantage of price skimming?

• Gains market share

• Covers costs and breaks even

• Allows an organisation to make the largest profit possible

What is Promotional pricing?

• When a business offers different prices to different customers

• When a business reduces price to below production cost to clear stock

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

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

• £7.50

• £5.00

• £10.00

What is the best pricing strategy for a well known firm selling a new hi-tech, high quality mobile phone?

• Loss Leader

• Price Skimming

• Market Leader

What is meant by Psychological pricing strategy?

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

• Items are sold using a special promotional offer which is brightly coloured and attracts attention

• Items are sold at production cost price to attract customers into the store and increase purchases

What is the aim of Loss Leader pricing strategy?

• To increase profit

• To make customers aware of entire product range

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

What is one question you still have about pricing strategies?