11 Questions
Which pricing method involves setting the price by adding a fixed amount to the cost of making the product?
Cost plus pricing
What is a disadvantage of cost plus pricing?
Price might be set higher than competitors or customer willingness
What is the primary aim of loss leader pricing?
Attract customers into the shop
When is price skimming most suitable according to the text?
For existing products with a strong brand image
What pricing method should be used for new products according to the text?
Penetration pricing
How is Price Elasticity defined in the text?
% change in quantity demanded / % change in price
What is the main purpose of price skimming?
To earn high profits initially
Which pricing method focuses on setting a very low price to attract customers quickly?
Penetration pricing
What is a disadvantage of implementing price skimming?
Backfiring if competitors offer similar products at lower prices
In competitive pricing, what can businesses compete on besides the price?
Quality and service
What is a key advantage of penetration pricing?
Ability to attract customers quickly
Test your knowledge on different pricing methods such as price skimming and penetration pricing. Learn about the advantages and disadvantages of each approach.
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