Page 173 - Cambridge IGCSE Business Studies

12: Marketing mix: product and price

is likely to buy the lower-priced product. Even if
consumers think a product is better than a similar
product, they may not be able to afford the higher

price for the better product. Some consumers will only
buy a product if the price charged is very high! Th is is
because being able to afford such products gives the

consumer a certain status, for example very expensive

items of jewellery, one-off designer clothing and top of
the range sports cars.

The price of a product might also be affected by the

availability of supply; for example if a product becomes
scarce, perhaps due to a poor harvest, then this will
Price is a very important part of the marketing mix cause the price to rise.

ACTIVITY 12.4

Choose a market that interests you. It could be the market for mobile phones, motor cars, shoes, fast food – in fact any good
or service, as long as you are able to research this market in the area where you live.
List at least six different suppliers, their product and the price of the product available to consumers in your area.

Use your research to complete the following tasks.
1 Explain why there are at least six similar products for your chosen market.
2 Explain why there is a difference between the product with the highest price and the product with the lowest price.

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Pricing methods
Businesses use several different methods for setting the price of products. Th e most

common pricing methods are shown in Figure 12.6.

Market
skimming

Promotional Penetration
pricing pricing
Pricing
methods

Competitive Cost‐plus
pricing pricing

Figure 12.6 Pricing methods