2.2.2 Price

Which of the following best describes 'price skimming' as a pricing strategy?

• Setting a low price to attract customers quickly

• Setting a high initial price and lowering it over time

• Charging the same price as competitors

• Offering products for free

What is 'cost plus pricing'?

• Setting prices based on what competitors charge

• Adding a percentage mark-up to the cost of producing a product

• Charging the lowest price in the market

• Offering discounts during special events

Which pricing strategy involves temporarily reducing prices to increase sales?

• Price skimming

• Promotional pricing

• Cost plus pricing

• Penetration pricing

How can technology influence pricing strategies?

• By making products heavier

• By increasing the cost of raw materials only

• By enabling dynamic pricing and reducing production costs

• By making products less attractive

Which of the following is an example of competitor pricing?

• Setting prices based on the cost of production

• Setting prices based on what similar businesses are charging

• Setting prices randomly

• Setting prices based on customer age

Why might a business use price skimming when launching a new product?

• To quickly gain market share

• To attract price-sensitive customers

• To maximise profits from early adopters

• To undercut competitors

Which stage of the product life cycle is most likely to use promotional pricing?

• Introduction

• Growth

• Maturity

• Decline

A company sets its price at £10, and the cost to make the product is £7. What is the mark-up percentage using cost plus pricing?

• 30%

• 43%

• 70%

• 3%

Which of the following is NOT an influence on pricing strategies?

• Market segments

• Product life cycle

• The weather in Australia

• Competition

If a business wants to appeal to a luxury market segment, which pricing strategy is it most likely to use?

• Low pricing

• Price skimming

• Promotional pricing

• Cost plus pricing