Btec Business Unit 2: Price Study Guide Questions And Correct Answers

Penetration Pricing {Ans: Selling at an initially low price in order to generate sales before the price is increased at a later point.}Premium Pricing {Ans: Pricing set at the high end to reflect the high quality / luxury end of the spectrum.}Predator or Destroyer Pricing {Ans: Similar to Penetration pricing but designed to wipe the competition out as the price cannot be beaten.}Pricing Tactic {Ans: Shorter term pricing tactics which are used to gain attention and boost sales i.e. promotions and offers}Cost Plus Pricing {Ans: The price is set by calculating the costs involved for the business of creating our sourcing the product and then adding on a profit margin.}Economy Pricing {Ans: Pricing set at the lower end of the spectrum which is regarded as affordable and attractive based on low pricing.}Price Skimming {Ans: Setting an initially high price in order to get high initial returns and then dropping the price later in the life cycle.}Psychological Pricing {Ans: Pricing which is pitched to look good value i.e. £9.99 - less than a full £10 price point i.e. attractive pricing.}Price Discrimination {Ans: Pricing which changes depending upon the consumer group buying i.e.