03. Name the three key approaches to setting prices, and the three key strategies

Some approaches for setting prices:

• • • Cost-plus pricing
    • Going rate pricing
    • Demand-led pricing pricing

(aka market-led pricing or percieved value  pricing)

You’ll need to understand all of these when arriving at a recommended price

Prices can be set to meet a range of objectives including:

• • • Profit maximisation
    • Profit margin maximisation
    • Turnover
    • Volume
    • Quality leader
    • Cost recovery
    • Survival
    • Loss Leader

Managing Price – Strategies

• • • Premium pricing
    • Mid-level pricing
    • Economy pricing

So, many pricing levels

• • • Super Premium
    • Premium pricing
    • Mid-level pricing
    • Economy pricing
    • Super Economy pricing etc