It’s all about the money... P2 – Part 2

( DR HATCHBACK) BASKET 1 - £5-£10000

BASKET 2 - £500 - £1000

BASKET 3 - £200 - £600

BASKET 4 - £ £2000

BASKET 5 - £100 - £300

£ £2.38 £ ( DR HATCHBACK) Total Basket Price £

£ £ £1.48 Total Basket Price £796.32

£ £3.00 £2.06 Total Basket Price £386.05

£29.99 £10.99 £ Total Basket Price £

£24.99 £ Total Basket Price £176.37

Price  This is the actual amount charged to the customers.  For what reason do businesses charge different prices for their products?

Price and the Marketing Mix Price is a very important part of the marketing mix. Price helps a business “differentiate” its product or service compared with other, similar products – E.g. High price = better quality? – E.g. Low price = better value / lower quality? The price that is set must be consistent with everything else in the marketing mix – E.g. a high-priced product needs to have features/benefits that customers feel justify paying more

Starter  What is pricing all about?  Work in pairs to suggest TWO ways which a business might decide on a price for their product.

Pricing Strategies Penetration pricing Setting a very low price to gain as many sales as possible and increase Market Share. E.g. Confectionary and Drinks market. Psychological pricing Using prices that are more likely to attract customers. E.g. £1.99 instead of £2.00. Commonly used by Supermarkets. Cost-plus pricing Cost of making Product + a mark-up = % or fixed amount. Used by most businesses especially smaller ones. Predatory pricing Setting a very low price to knock out all other competition. Petrol Companies use this a lot!

Pricing Strategies – what would you recommend and why?  In pairs, please work through the sheet provided and be ready to share your answers!

What’s the price???  Attach the correct price to the correct item!  Discuss your answers with a partner and make any changes!  Be ready to share!

 In your part 1 word document answer the following questions: What are the 4 different pricing strategies?  Definition: The pricing strategy is...  Meaning: This means that...  Example: An example for this strategy is... What are the pricing strategies used by Sainsbury’s & Celebrations?  The pricing strategies used by Sainsbury’s & Celebrations are... Why do they use these strategies?  They use these strategies because... P2 – Part 2 Lesson Objective: To assess the Marketing mix for a selected branded product... Progress Board

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