Business – 3.3 The marketing mix – Pricing methods | e-Consult
3.3 The marketing mix – Pricing methods (1 questions)
Login to see all questions.
Click on a question to view the answer
Model Answer
| Pricing Method | Main Objective | Advantage | Disadvantage |
|---|---|---|---|
| Penetration Pricing | Rapidly gain market share by offering a low introductory price. | Encourages quick adoption and can deter entry by competitors. | Low initial margins may strain cash flow; price may be perceived as low quality. |
| Price Skimming | Maximise profit from early adopters willing to pay a premium. | Generates high margins and helps recover R&D costs quickly. | May attract competition and limit long‑term market share. |
| Price Discrimination | Capture consumer surplus by charging different prices to different segments. | Increases overall revenue without changing the product. | Requires detailed market segmentation and can raise fairness or legal concerns. |