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