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Flip to reveal answersWhy is price unique among the 4 Ps?
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All 20 Flashcards — Price
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Question
Why is price unique among the 4 Ps?
Answer
It's the only P that directly generates revenue — all others cost money.
💡 Hint
Only P that earns money
Question
What is cost-plus pricing?
Answer
Add a percentage mark-up to the cost of making the product.
💡 Hint
Cost + mark-up %
Question
New to market, need customers fast — which pricing?
Answer
Penetration pricing — low price attracts customers quickly.
💡 Hint
Penetration
Question
Price is the only P that generates ___
Answer
Revenue — all other Ps cost money.
💡 Hint
Revenue
Question
Name four factors affecting pricing decisions
Answer
Costs, competitors' prices, customer demand/willingness to pay, brand image, product life cycle stage.
💡 Hint
Costs + rivals + demand + brand
Question
Penetration = LOW entry. Skimming = ___
Answer
HIGH entry price — opposite strategies for different situations.
💡 Hint
High entry
Question
What is penetration pricing?
Answer
Set a LOW price at launch to attract customers, then raise it later.
💡 Hint
Low entry → raise later
Question
Innovative product, no competition — which pricing?
Answer
Price skimming — charge high while you're the only option, lower when rivals appear.
💡 Hint
Skimming
Question
Name all seven pricing strategies
Answer
Cost-plus, penetration, skimming, competitive, loss leader, premium, dynamic.
💡 Hint
C-P-S-C-L-P-D
Question
What is price skimming?
Answer
Set a HIGH price at launch (for early adopters), then lower over time.
💡 Hint
High entry → lower later
Question
Many competitors, similar products — which pricing?
Answer
Competitive pricing — match or slightly undercut rivals.
💡 Hint
Competitive
Question
Why must price cover costs?
Answer
To make a profit — if price is below cost, the business loses money on every sale.
💡 Hint
Below cost = loss
Question
How does brand image affect pricing?
Answer
Premium/strong brands can charge more because customers trust them and perceive higher value.
💡 Hint
Strong brand = higher price
Question
What is competitive pricing?
Answer
Match or slightly undercut competitors' prices.
💡 Hint
Match rivals
Question
Pricing depends on costs, competitors, demand, ___ and ___
Answer
Brand image and life cycle stage.
💡 Hint
Brand + life cycle
Question
Premium brand, loyal customers — which pricing?
Answer
Premium pricing — permanently high to reflect quality and exclusivity.
💡 Hint
Premium
Question
Quick: Cost-plus pricing = cost + ___
Answer
Mark-up percentage.
💡 Hint
Mark-up %
Question
When discussing pricing, always explain ___
Answer
WHY the strategy suits the specific business — don't just describe it.
💡 Hint
Why it fits THIS business
Question
Name three more pricing strategies: loss leader, premium, dynamic
Answer
Loss leader = sell at a loss to attract buyers. Premium = permanently high for quality. Dynamic = prices change with demand.
💡 Hint
Loss, premium, dynamic
Question
How does life cycle stage affect pricing?
Answer
New products may use penetration or skimming; mature products may need competitive pricing.
💡 Hint
Different stages = different strategies
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Full study notes for Price
Topic 4.5 hub
The seven Ps of the marketing mix
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