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4 P's - PRICE (PENETRATION PRICING (Newcomers set their prices low to…
4 P's - PRICE
DEFINITION
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Must consider a product’s costs, how much customers are willing to pay, profit targets, competition, etc
COST-PLUS PRICING
Adding a percentage or predetermined amount (markup) to average cost per unit to set the selling price
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PRICE/MARKET SKIMMING
Get a feel for what the market is like, set the price high, then as you understand the market better your prices will slowly decrease
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PRICE DISCRIMINATION
The price of a product varies per country, which depends on the market; however, the products should not be easily traded
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LOSS LEADERSHIP
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Products are sold at a loss, but regain their losses through their other products
e.g. PS3 sold at a loss, but profits are gained through games
PROMOTIONAL PRICING
Offer discounts, rebates, promotions, etc.
Assure that your market likes discounts, otherwise there will be no reason in offering the promotions