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Price - Coggle Diagram
Price
Factors that affect price
Objectives
Taxes
Competition
Consumers perceptions
Costs
Marketing Mix
Competition-based pricing
Choosing a price based on what competitors are charging
Prices could be the same or price wars
Business compete in non-price competition
Promotions
New packaging
Better customer service
Promotional PricingLowering the price of an existing product for a short period of time.
Discounts/sales
Psychological pricing
Loss leaders - selling a product below cost to draw in customers
Penetration pricing: Where a business introduces a new product and sets a low price
Benefits
Gain market share
Gain customers first, then
increase price
Attract buyers (other
businesses)
Common in mass markets
Drawbacks
Hurts profits
Negative respo when prices raisednse
Price leader - sets the price for the
market
Avoid price wars
Smaller businesses accept
Price Skimming: Setting a high price first and then
lowering it later
Generate high revenue before competition arrives
Target early adopters
Cost-plus pricing: Adding a mark-up to products
Destroyer/predatory pricing: setting a low price until rivals have gone out of business