Pricing Strategies

Match the pricing strategy with its definition. Can you add an example for each one?

1 Penetration Pricing _____ This pricing strategy intends to give an impression of value. EXAMPLE: _________________________

2 Price Skimming _____ a pricing strategy that businesses use to set flexible prices for products or service based on current market demand. EXAMPLE: _________________________

3 Dynamic Pricing _____ A strategy in which a high price is set to yield a high profit margin. EXAMPLE: _________________________

4 Price Leadership _____ A firm sets a very low price in order to drive other firms out of the market. EXAMPLE: _________________________

5 Predator (or Destroyer) Pricing _____ This occurs when rival companies undercut each other's price cuts in order to increase sales volume by keeping existing customers. This strategy leads to reduced profit margins. EXAMPLE: _________________________

6 Loss Leaders _____ A large company (the price leader) sets a market price that smaller firms (price takers) tend to follow. EXAMPLE: _________________________

7 Psychological Pricing _____ A business sets low prices for certain products in order to encourage customers to buy other, fully priced products. EXAMPLE: _________________________

8 Price War _____ A strategy in which low prices are set to break into a market or to achieve a sudden increase in market share. EXAMPLE: _________________________

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