Unit 2.2.2 Price

Why would a luxury watch brand set its prices high?

• To attract as many customers as possible

• To impress others

• For the perception of high quality

• To make the product affordable

When the price of a product falls, what usually happens to demand?

• Falls

• Increases

• Stays the same

• Nothing

What could happen if a business sets its prices too low?

• The business will fail to make a profit

• The business is guaranteed sales

• The business increases its reputation

• Employees may leave the company

Which of these best describes a high volume pricing strategy?

• A high volume of products produced at a low cost in the hopes of selling large quantities

• Maximising the difference between the production cost and selling price of a product but selling lower quantities

Which of these best describes a high margin pricing strategy?

• A high volume of products produced at a low cost in the hopes of selling large quantities

• Maximising the difference between the production cost and selling price of a product but selling lower quantities

True or False: The quality of a product is important when using a high margin pricing strategy.

• True

• False

Which of these adds value to a product?

• Production costs

• Sales

• Branding

• Colour

Which of the following is NOT an influencing factor on pricing strategies?

• Technology

• Employees

• Competition

• Market segments

What might a business do to the price of a product that is in the decline stage of the product life cycle?

• Decrease it

• Increase it

A smaller market with customers that have specific needs and interests.

• Mass market

• Niche market

• Lead market

• Stale market