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Price - Coggle Diagram
Price
Type of pricing
Cost-plus pricing
Adding a mark-up to products% added to costs to set a price thatmakes a profit
Common in retailers
Price Skimming
Setting a high price first and then lowering it later
Generate high revenue before competition arrives
Target early adopters: Consumers who are keen tobuy new products as soon asthey are launched
Advantages
Make costs back quickly
Segment the market
Early adopters
Brand loyalists
Regular customers
Disadvantages
Short-term benefits
Research needed
Hard to predict demand
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
Promotional Pricing
Psychological pricing e.g. $9.99 vs $10
Loss leaders - selling a product below cost todraw in customers
Discounts/sales
Lowering the price of an existing product for a shortperiod of time.
Penetration pricing
Gain market share
Gain customers first, then
increase price
Attract buyers (other
businesses)
Common in mass markets
drawbacks
Hurts profits
Negative response
when prices raised
Factors that affect price
Objectives
Taxes
Competition
Consumers perceptions
Costs
Marketing Mix