Pricing – Task 9 – by 27th November

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Presentation transcript:

Pricing – Task 9 – by 27th November John Lewis

Marketing mix Ways to attract the customer

Pricing . Will affect image – value or premium To cover costs To attract customers To match or better rivals

Competition based pricing – price charged is similar to rivals Search for John Lewis Pricing

Competing with Value Pricing?

Premium Pricing Charging a high price for additional quality or extra service Waitrose sell a range of luxury food items and food for entertaining

Price Skimming Charging a high price to start with then the price is reduced over time to attract a larger market. High prices can help to pay off expensive research costs. Early innovators may pay these high prices.

Psychological Pricing Using £99 99p etc in pricing. May only be 1p or a £1 cheaper but can influence people to think that item is much cheaper than it actually is.

Penetration Pricing Prices charged are low for a short period to get people to try a product. Often used with new magazines and food items. If people like it they may continue to buy it

Sale or Discount Pricing Use to clear stock that is not selling or is out of season.

Cost plus Pricing Working out costs to make a product and then adding on a mark up for that product. This guarantees that a profit is made on each good. Often used on car industry, electrical goods etc

Example – IPAD Mini

Product Bundle Pricing

Questions Read both articles – 2011 and 2012 What has been the impact of the price match policy on the performance of the JL partnership? In 2011 & 2012 Do you think it is right for John Lewis to focus on competitive prices?