Topic Area 4: Creating a marketing mix to support a product

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What is the main idea of competitive pricing?: Setting price similar to competitors
How does psychological pricing aim to influence customers?: Make prices appear slightly lower
What is a likely advantage of price skimming?: Maximise short-term profits from early buyers
Why might a firm use penetration pricing?: Build market share quickly with low price
Which factors influence choice between skimming and penetration?: Expected demand and brand strength
How does target customers' income affect pricing decisions?: Limits prices customers can afford
Why must production costs be considered in pricing?: To ensure selling price covers costs
What is a likely risk of selling below cost temporarily?: Reduced profits and possible financial losses
How should prices change during product decline?: Cut prices to try boost demand
What is a drawback of psychological pricing with percentage discounts?: Odd price points complicate discount calculations
What is a disadvantage of undercutting competitors?: May reduce profits and cause losses
Which external factor can directly affect pricing decisions?: Changes in costs of raw materials
Why might a business charge slightly more than competitors?: To position product as higher quality

Round complete