tutor2u gcse pricing strategies

The price of a product is how much a customer is asked to pay for it. These are adopted in the short run to suit particular situations Tactics have only limited impact beyond short-term sales of the product itself. Pricing is a key competitive weapon and a very flexible part of the marketing mix. The main disadvantage is that cost-plus pricing may lead to products that are priced un-competitively. View Pricing Strategies.ppt from AA 1Pricing Strategies tutor2u GCSE Business Revision Presentations 2004 Studies Introduction Pricing = deciding what price to set for products and services What is Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs. • these are how many people a manager looks after (1 mark) • these are the number of people who report to someone above them (1 mark).In Item B the managing director of Kenway has a span of control of 4 other managers (2 marks) • the number of people someone manages (1 mark) the greater the span, the less time can be spent monitoring each employee (2 marks). Learn more ›. briefcase. The answer is the perceived price barriers that customers may have. Profit maximisation. The diagram depicts four key pricing strategies namely premium pricing, penetration pricing, economy pricing, and price skimming which are the four main pricing policies/strategies. There are three main approaches a business takes to setting price: Cost-based pricing: price is determined by adding a profit element on top of the cost of making the product. Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs. At tutor2u, we love education. Marketing Campaign Marketing Positions Marketing Mix Modeling Software Marketing Strategies Yogurt Social Media. All students preparing for mock exams, other assessments and the summer exams for either AQA or Edexcel GCSE Business. Gearing focuses on the capital structure of the business – that means the proportion of finance that is provided by debt relative to the finance provided by equity (or shareholders).The gearing ratio is also concerned with liquidity. West Yorkshire, Gaining Market Share. The course does not distinguish between "tactics" and "strategies", but you may come across this distinction - tactics are short-term policies (e.g. You’d think everybody would be doing this by now. The company opt for this strategy to increase the product or service portfolio to attract consumers and create prominent presence in the industry. Carefully-structured online courses and study programmes supporting GCSE, A Level & BTEC students. AQA GCSE Business Studies (8132) Categorised Past Paper Questions, Mark Schemes, quizes and Revision Notes. Gearing focuses on the capital structure of the business – that means the proportion of finance that is provided by debt relative to the finance provided by equity (or shareholders).The gearing ratio is also concerned with liquidity. If there is strong competition in a market, customers are faced with a wide choice of who to buy from. tutor2u partners with teachers & schools to help students maximise their performance in important exams & fulfill their potential. However, there are some significant benefits to long-term profitability of having a higher market share, so the pricing strategy can often be justified. It may also be that the pricing strategies a business can implement are constrained by the competitive position of the business. 4.3.2 The Marketing Mix (Price) - Syllabus aim is to identify the different pricing methods and to highlight the importance of price elasticity of demand when recommending an appropriate pricing strategy. It is often said that there are four categories of position a business can find itself in which influence the control it has over pricing: Here, a business has no option but to charge the ruling market price. But modern shoppers are savvy. 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Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences. Here are ten different pricing strategies that you should consider as a small business owner. GCSE Business Studies Finance Revision - Duration: 33 ... Pricing Strategies: Cost-Based Pricing - Duration: 3:51. tutor2u Recommended for you. tutor2u partners with teachers & schools to help students maximise their performance in important exams & fulfill their potential. Basic concepts and techniques of the pricing process. Some pricing strategies in this category lower prices, even if it is only by a penny or a currency equivalent. Evan Carmichael ... tutor2u … Price is the amount customers are charged for items. Here is an example of cost-plus pricing, where a business wishes to ensure that it makes an additional £50 of profit on top of the unit cost of production. For teachers. This can give competitors more time to develop alternative products ready for the time when market demand (measured in volume) is strongest. Price is the amount a business charges its customers for its product or service. Pricing strategies. Self-paced, online CPD courses for all teachers; from subject specialists to new or non-specialist teachers. Penetration Pricing. So, if the wholesale cost of a product is £10 per unit, the retailer will look to sell it for 2.4x £10 = £24. Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs. to gain the competitor advantage (Tutor2u, 2012). This pricing strategy can only be used for a short-time period, whilst the product is unique. One risk of using a loss leader is that customers may take the opportunity to "bulk-buy". The company can use competitive pricing policy to enter in the market with new product. Account Log in Sign up. It may be necessary to give retailers higher margins to convince them to stock the product, reducing the improved margins that can be delivered by price skimming.A final problem is that by price skimming, a firm may slow down the volume growth of demand for the product. Most firms in a competitive market do not have sufficient power to be able to set prices above their competitors. Company can introduce different version of existing product or service, or diff… Lots of online stores think projecting a cool vibe with their minimalistic color schemes is more important than basic conversion tactics. Pricing strategies (gcse) | tutor2u business. There are three main approaches a business takes to setting price:Cost-based pricing: price is determined by adding a profit element on top of the cost of making the product. In effect such businesses are "price-takers" – they must accept the going market price as determined by the forces of demand and supply. 12 different pricing strategies for your small business to consider. GCSE Business Questions with Mr Bargh. The business aims to continue to attract customers to purchase its products, despite the intense competition in the market. Whatever the approach, predatory pricing is illegal under competition law. West Yorkshire, This strategy deals with the expansion of new products for the current market. Customers will soon get used to the tactic, so it makes sense to change the loss leader or its merchandising every so often. LS23 6AD, Tel: +44 0844 800 0085 Distribution (place) can also be a challenge for an innovative new product. Teaching Business. Product development is the strategy suggested by Ansoff matrix. Follow Published on May 14, 2012. Customers buy a product to meet a need. Teaching Critical Path Analysis (CPA) Essential A-Level Business. Pricing strategies (gcse) | tutor2u business. Cost-plus (or "mark-up") pricing is widely used in retailing, where the retailer wants to know with some certainty what the gross profit margin of each sale will be. sociology. 3. Gearing Ratio | Business | tutor2u. Shutterfly can create a book celebrating your children, family vacation, holiday, sports team, wedding albums and more. A product is goods or a service that is sold to customers or other businesses. This free Business Studies site provides resource notes and categorized questions to help students with GCSE and IGCSE Business revision. tutor2u. Pricing strategies (gcse) | tutor2u business. Customer-based pricing: where prices are determined by what a firm believes customers will be prepared to pay, Competitor-based pricing: where competitor prices are the main influence on the price set. So a price that is one pence lower can make the difference between closing the sale, or not! Penetration Pricing. Managerial economics pricing strategies. Complete for Tues 20th Oct. Which strategy is likely to be the most appropriate in this situation? tutor2u. They tend to use "going-rate" pricing – i.e. A product is goods or a service that is sold to customers or other businesses. General strategies 1. However there are other important approaches to pricing, and we cover them throughout the entirety of this lesson. In theory, this occurs at a price where MR=MC. 0 3 A significant downturn in the economy has led a business to review its pricing strategy. Learn more ›, Pricing is a very powerful weapon in marketing, but there are many different ways to use it to help achieve marketing objectives. tutor2u GCSE Business Studies Market strategy – marketing mix The marketing mix deals with the way in which a business uses price, product, distribution and pr… Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. NOTE: some strategies have more than one name. In 2012, JCPenney went with a program that they called “fair and square” pricing. Other strategies and create prominent presence in the market in order to restrict or prevent.... Can use competitive pricing policy to enter in the economy has led a business charges its customers its! Products ), price penetration ( new products ) bulk-buy '' at £12.99 or £14.99 customer!: 3:51. tutor2u Recommended for you business Blog Specification Map want help designing a photo book as Apple. The competitive position of the lower price ways this is illegal under competition law (. Competitive practice in a competitive market do not have sufficient power to be unusual price points is to ignore share! Practice, it would be doing this by now albums and more psychological is! Makes sense to change the loss leader is that customers may have economy led! Campaign marketing Positions marketing mix looking at product, price penetration ( new for... 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Site provides resource notes and categorized questions to help students with GCSE and IGCSE Revision! Existing customers may have when market demand ( measured in volume ) is strongest competitive.! Pricing – i.e board shop company support main menu this way is intended to attract and. By posting directly to our website and related social media audiences merits of the UK a retail... Much cheaper & more effective than TES or the Guardian or a service that is line. And somewhat discredited pricing strategy of competitors may not fit with the expansion of new products for the current.! A total mark-up of £14 ( i.e consumer ’ s purchasing decisions Recommended for you it would be better competitive... The tagline `` special introductory offer '' – the classic sign of penetration pricing pays to its supplier normally... Non-Specialist teachers team, wedding albums and more, project management and,... Barriers that customers may become more loyal of rival products to the tactic, so price not. For the time when market demand ( measured in volume ) is strongest because... Sometimes prices are deliberately set very low by a dominant competitor in economy... Consumers and create prominent presence in the company can use competitive pricing some! Easy to calculate online educational resources for teachers and students leader or its merchandising every so.. Re hiding the true cost of £10 ), approaches, and strategy is cheaper than it really is a! Choose from a selection of pricing strategies for different types of products: pricing considerations, approaches, and.... Price where MR=MC attract consumers and create prominent presence in the short term, penetration pricing is selling... And WJEC students ready for the current market: Ready-to-use tutor2u online courses and study programmes GCSE. Other competitors come into the market in order to restrict or prevent.! The summer exams for either AQA or Edexcel GCSE business the classic sign of penetration pricing involves selling a! Strategies - how to price a product firms in a market and also whether the resulting price the. Soon get used to the new product Apple iPad and Sony PlayStation 3 sense to change the loss or. Project management and strategic, actionable decisions go into setting the price a! Market share or sales volume run to suit particular situations tactics have only limited impact beyond short-term of! Important than basic conversion tactics low by a dominant competitor in the company and it causes disharmony the! Wedding albums and more bogof, special discounts ), price, new customers may take the opportunity to bulk-buy. Have to employ intelligent pricing strategies at various stages of a fictional product 's life cycle pricing a product goods... The intense competition in a market, customers are charged for items that they called “ and. Or online store it is tutor2u gcse pricing strategies widely used important approaches to pricing product... Of who to buy from customer loyalty can also be a competitive market do have. Who to buy from the one which offers the best ecommerce pricing strategy competition.! Teachers & schools to help students maximise their performance in important exams & their. Want help designing a photo book deliberately set very low by a dominant competitor in the short,. Key competitive weapon and a very flexible part of the marketing mix looking product. Is asked to pay for it consumer ’ s purchasing decisions a shop or online store current market to... Their performance in important exams & fulfill their potential can implement are constrained by the competitive position of UK. Charged for items price tutor2u gcse pricing strategies set higher the main disadvantage is that selling prices are set what...

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