Price mix - SS2 Commerce Past Questions and Answers - page 1
What is the primary purpose of penetration pricing?
To maximize revenue from early adopters
To gain a large customer base
To set a high initial price for exclusivity
What does skimming pricing involve?
Offering competitive prices to attract customers
Targeting price-sensitive customers
Setting a high initial price for exclusivity
Which component of the price mix focuses on the specific actions and techniques used to implement pricing strategies?
Pricing objectives
Pricing tactics
Pricing policies
What is one common pricing objective for businesses?
Reducing revenue
Maximizing profitability
What is the purpose of value-based pricing?
Targeting early adopters
Offering competitive prices
Setting prices based on perceived customer value
Explain the difference between penetration pricing and skimming pricing.
Penetration pricing involves setting a low initial price to gain a large customer base, while skimming pricing involves setting a high initial price for exclusivity and targeting early adopters or customers who are willing to pay a premium.
What factors should businesses consider when determining their price mix?
Businesses should consider factors such as market conditions, customer preferences, competitive landscape, production costs, and desired profit margins when determining their price mix. By considering these factors, businesses can align their pricing decisions with their business goals and market dynamics.