AB 209 STUDY Extraordinary Life/ab209study.com AB 209 STUDY Extraordinary Life/ab209study.com | Page 10

describe the competition ’ s product / service and provide the price . Then describe the pricing strategy you will
use and how the competition ’ s prices have affected your competitiveness in the marketplace .
Pricing Strategies
Penetration Pricing = Pricing below normal , long-term price to gain market share .
Skimming Pricing = Pricing an item high in the short term to capture the prestige market ? helps torecover start-up costs .
Variable Pricing / Dynamic Pricing Strategy = Lower pricing for certain customers based on their abilityto pay . ( Amazon uses this type )
Price Lining = Different quality level product of a certain type are priced by category . Ex : Women ’ shandbags ? Designer bags $ 300 , name brand $ 200 and all other $ 100 .
Market Pricing = pricing based on the market- what people are willing to pay only works if there is verylittle or no competitors .
Explain whether you will buy on credit and the kind of credit terms you expect from your suppliers and why .
Then explain your customer credit policy ; explain whether you will extend credit to your customers and why or why

describe the competition ’ s product / service and provide the price . Then describe the pricing strategy you will

use and how the competition ’ s prices have affected your competitiveness in the marketplace .

Pricing Strategies

Penetration Pricing = Pricing below normal , long-term price to gain market share .

Skimming Pricing = Pricing an item high in the short term to capture the prestige market ? helps torecover start-up costs .

Variable Pricing / Dynamic Pricing Strategy = Lower pricing for certain customers based on their abilityto pay . ( Amazon uses this type )

Price Lining = Different quality level product of a certain type are priced by category . Ex : Women ’ shandbags ? Designer bags $ 300 , name brand $ 200 and all other $ 100 .

Market Pricing = pricing based on the market- what people are willing to pay only works if there is verylittle or no competitors .

Explain whether you will buy on credit and the kind of credit terms you expect from your suppliers and why .

Then explain your customer credit policy ; explain whether you will extend credit to your customers and why or why