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Outline three pricing strategies a marketing manager could consider in setting a selling price for a product or service - Leaving Cert Business - Question (B) - 2017
Question (B)
Outline three pricing strategies a marketing manager could consider in setting a selling price for a product or service. Name one pricing strategy suitable for a pr... show full transcript
Worked Solution & Example Answer:Outline three pricing strategies a marketing manager could consider in setting a selling price for a product or service - Leaving Cert Business - Question (B) - 2017
Step 1
Outline three pricing strategies a marketing manager could consider in setting a selling price for a product or service.
Answer
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Premium Pricing: This strategy sets the price at a high rate to reflect consumers' perception of a superior product. It is ideal for businesses that offer unique products or services, creating a strong marketing campaign to support the premium price. Examples include bespoke diamond rings or high-end fashion products that have a unique selling point (USP).
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Penetration Pricing: This strategy involves setting the price lower than competitors initially to gain market share. It attracts customers who are price-sensitive and can help businesses establish a foothold in the market before gradually increasing prices later.
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Psychological Pricing: This strategy involves pricing products to create an emotional response, such as setting a price just below a round number (e.g., €299 instead of €300). It can enhance perceived value and stimulate demand.
Step 2
Name one pricing strategy suitable for a product or service of your choice, explaining the reason for your choice of pricing strategy.
Answer
Bundle Pricing for Subscription Services: This strategy combines multiple services or products into one package at a lower total price than if purchased separately. For example, a telecommunications company may offer a bundle of internet, phone, and TV services. This approach encourages customers to purchase more items, provides savings, and enhances customer convenience by simplifying their purchasing decision.