Business Studies - 0450 CIE

Price:

Gbogbo ọrọ náà

Price is the only part of the marketing mix that brings money in; the rest cost money. Set the price too high and customers walk away; set it too low and the firm gives away profit it could have earned. Choosing a pricing method is one of the most important and most tested decisions a business makes.

In this lesson you will compare the main pricing methods, cost-plus, competitive, penetration, skimming and promotional, learn the benefits and limitations of each, and practise recommending the right one for a given situation. You will also meet price elasticity of demand and see why it decides whether raising a price will help or hurt revenue.

Ebumnobi

Pricing methods (benefits and limitations of different methods), e.g. cost plus, competitive, penetration, skimming, and promotional
Recommend and justify an appropriate pricing method in given circumstances
Understand the significance of price elasticity: difference between price elastic demand and price inelastic demand; importance of the concept in pricing decisions (knowledge of the formula and calculations of PED will not be assessed)

Akọmọ Ojú-ẹkọ

The right price depends on the product, the competition and how sensitive customers are to price. A new product needs a different strategy from one with many rivals, and a firm that misjudges how customers react to a price change can lose revenue overnight. Exam questions regularly ask you to select and justify a pricing method, so understanding the trade-offs is essential.

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Ayẹwo Ẹkọ

Ekele diri gi maka imecha ihe karịrị na Price:. Ugbu a na ị na-enyochakwa isi echiche na echiche ndị dị mkpa, ọ bụ oge iji nwalee ihe ị ma. Ngwa a na-enye ụdị ajụjụ ọmụmụ dị iche iche emebere iji kwado nghọta gị wee nyere gị aka ịmata otú ị ghọtara ihe ndị a kụziri.

Ị ga-ahụ ngwakọta nke ụdị ajụjụ dị iche iche, gụnyere ajụjụ chọrọ ịhọrọ otu n’ime ọtụtụ azịza, ajụjụ chọrọ mkpirisi azịza, na ajụjụ ede ede. A na-arụpụta ajụjụ ọ bụla nke ọma iji nwalee akụkụ dị iche iche nke ihe ọmụma gị na nkà nke ịtụgharị uche.

Jiri akụkụ a nke nyocha ka ohere iji kụziere ihe ị matara banyere isiokwu ahụ ma chọpụta ebe ọ bụla ị nwere ike ịchọ ọmụmụ ihe ọzọ. Ekwela ka nsogbu ọ bụla ị na-eche ihu mee ka ị daa mba; kama, lee ha anya dị ka ohere maka ịzụlite onwe gị na imeziwanye.

Adding a percentage mark-up for profit to the unit cost is called: A. penetration pricing B. cost-plus pricing C. price skimming D. competitive pricing Answer: B
Launching a new, unique product at a high price is called: A. penetration pricing B. promotional pricing C. price skimming D. cost-plus pricing Answer: C
If demand is price elastic, raising the price will cause total revenue to: A. rise B. fall C. stay exactly the same D. become zero Answer: B
Setting a low price to break into a market is: A. skimming B. cost-plus C. penetration pricing D. promotional pricing Answer: C
Demand for a product with very few close substitutes is most likely to be: A. price elastic B. price inelastic C. always zero D. fixed by law Answer: B