Title: (Optional) Explain pricing strategies.
Course: Entrepreneurship Infusion Unit > Section: Understanding Basic Economic Principles

Explanation should include strategies for

- cost-plus pricing—calculating the costs and adding a mark-up
- value-based pricing—setting a price based on how much the customer believes the product is worth
- competitive pricing—setting a price based on what the competition charges
- prestige pricing—setting a price at a high level, with no discounting, to give the perception of quality and exclusivity
- economy pricing—aiming to attract the most price-conscious of consumers
- price skimming—setting a high price and lowering it as the market evolves
- psychology pricing—setting prices to encourage the customer to respond on an emotional level rather than a logical one
- penetration pricing—setting a low price to enter a competitive market and raising it later
- bundle pricing—selling multiple products for a lower rate than consumers would face if they purchased each item individually
- dynamic pricing—pricing that changes based off demand.

Process/Skill Questions:

- Why is product/service price a critical factor in the success or failure of a business?
- What is meant by the "right price" for a product?
- How does cost-oriented pricing differ from demand-oriented pricing? Why is an understanding of this difference essential to entrepreneurs?
- What is the key to demand-oriented pricing?
- How is technology used in pricing?
- Why is it a good idea to check competition before setting prices?
- Does a high price always mean high quality merchandise? Why, or why not?
- What can be the effects of selling items below vendor price?
- What is price fixing? Price gouging? Why are these practices illegal?
- What are the pricing objectives of a new business? Of an established business?
- How do the global economy and political climate affect price? How can this be seen in today's market?
- What are the market factors that affect price? How might each factor affect price?
- What costs are unique to pricing goods? What costs are unique to pricing services? What costs can be common to both?
- How does pricing affect product, place, and promotion decisions?
- Why is it difficult for marketers to price products strategically?
- How does psychological pricing increase demand and enhance value for a customer?
- How can a company compare current products/services to another company to evaluate customer value?
- How does bundle pricing encourage customers to spend more? Why is this effective for companies? Which type of companies use bundle pricing?