DoRevision Sign up free

Pricing Strategies

The main pricing strategies a business can use, from cost-plus and competitive pricing to penetration, skimming and loss leaders, and the factors that influence the choice.

⏱️ 15 min 🎯 12 activities Teachers Not yet rated Students Not yet rated

Revise this, the fun way

Play it interactively, earn XP and build a streak, free.

Start revising free

What you'll cover

Getting the price right 💷

Set a price too high and customers walk away; set it too low and the business loses money. Choosing the right **pricing strategy** is one of the four parts of the marketing mix (price, product, promotion, place). This module covers the main pricing strategies a business can use, and what influences the choice.

The pricing strategies 🔑

The main pricing strategies in the Edexcel course:

Match the strategy 🔗

  • Cost-plus pricing
  • Competitive pricing
  • Loss leader
  • Psychological pricing
  • Add a markup to the cost of the product
  • Match the prices of rival businesses
  • Sell cheaply to attract customers who buy other items
  • Use a price like 9.99 to feel cheaper

Name that strategy 🎯

A new smartphone launches at a very high price, which is then lowered over the following months. Which strategy is this?

  • Price skimming
  • Penetration pricing
  • Cost-plus pricing
  • Loss leader

Penetration vs skimming ⚖️

These two opposite strategies are often confused. Both are used when launching a product.

Real pricing strategies ✅

Select the TWO that are recognised pricing strategies.

  • Penetration pricing
  • Cost-plus pricing
  • Product placement
  • Market segmentation

What shapes the price 💡

A business does not pick a strategy at random. The Edexcel course lists four main **influences on price**: - **Technology** (online selling can push prices down) - **Competition** (many rivals means keener prices) - **Market segments** (a luxury segment will pay more) - **The product life cycle** (a new product may be skimmed, an older one discounted)

Cost-plus, step by step 🪜

An interactive activity.

The strategies in words 🧱

With _____ pricing, a business adds a markup to its costs. With _____ pricing, it matches its rivals. A _____ price helps a new product enter a busy market, while price _____ earns high profits from early buyers of an innovative product. A _____ is sold cheaply to draw customers in.

cost-plus competitive penetration skimming loss leader promotion place branding high product

Spot the skimming 🖍️

An interactive activity.

Advise the business 🧭

An interactive activity.

Recommend and justify ✍️

An interactive activity.