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IGCSE Business Studies Student CD-ROM
Pricing methods
Use for new/unique products which are very
Skimming
different from anything else on the market
Use for new products which are to
Penetration compete with similar products already
established in the market
Used for new products launched by a
business with an already strong brand image,
Methods of pricing Competitive
or for existing products which were launched
using skimming or penetration pricing
Used to create brand awareness or attract
Promotional
customers
Often used by retailers to set the final price
Cost-plus
of the product to consumers
Price elasticity of demand
Price elasticity of demand
Measures the effect on
the demand for a product
of a change in its price
Elastic Inelastic
The percentage change in The percentage change in
demand is greater than demand is less than the
the percentage change in percentage change in
price price
Reduce price to increase Increase price to increase
sales revenue sales revenue
© Cambridge University Press 2014 IGCSE Business Studies Section 3 – Mind maps 6
