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Marketing mix: price - Coggle Diagram
Marketing mix: price
Competitive pricing
Competitive pricing is the practice of a business setting the price of its goods or services at the same or similar level to that of its competitors.
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Penetration pricing
Penetration pricing is a pricing method that involves setting
a low price in order to enter an industry.
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Loss leader pricing
Loss leader pricing consists of pricing a product below its cost of production so as to attract customers to also purchase other items (with their higher profit margins) at the same time
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Predatory pricing
method that involves charging a low price, sometimes even below the cost, so as to damage the sales of rivals.
Advantages
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Low prices can be a barrier to entry, preventing potential rivals from competing
Disadvantages
anti-competitive, so is illegal
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premium pricing
Premium pricing involves a business permanently setting a high price for its products because of the associated image, reputation, or status associated with its high-quality products.
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Disadvantage
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create higher customer expectations, leading to increased scrutiny
Dynamic pricing
Dynamic pricing is a pricing method that strives to determine the optimum price at different periods of time. Prices are based on the ability and willingness of customers to pay at a specific time for a good or service.
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Contribution pricing
Contribution pricing is a pricing method that involves setting the price greater than the per unit variable costs of production to ensure that a positive contribution is made towards the firm's fixed costs.
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