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Marketing Mix - Pricing (Product mix pricing (Product line pricing…
Marketing Mix - Pricing
Types of pricing
Cost-based pricing
Using break-even analysis a company can see whether it is going to be worthwhile offering a product . This can be known as a full or total cost approach
Second-market discounting is where different prices are offered at different times. eg in a restaurant when it is not peak hours in order to cover the fixed costs
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Competitor-based pricing
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If an offering is perceived to offer greater value to customers than its competitors, then a higher price may be charged. If lower, than a company may have to charge a lower price unless it is able to increase the offerings perceived value
Customer-based pricing
Demand pricing
Setting a price based on customers professed willingness to buy a company's offering at various price option
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Valued-added pricing
Adding features or services to increase the value of an offering to consumers that differentiates it from competitors and enables a higher price to be charged
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Product mix pricing
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Optional-product pricing
Offering optional products or accessories alongside the principle product (eg buying a phone case along with a phone)
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By-product pricing
This is the process of offsetting the cost of a principal product by finding a way to sell by-products incurred in production (eg spent grains from brewers can go into Marmite)
Product bundle pricing
Involved selling a set of related products in a bundle at a price lower than if purchased indivually