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Pricing Policies, Quality, Adding Value and Advertising

This resource is designed specifically for Unit 11 of the Edexcel BTEC National qualification, 'Introduction to Marketing'.

Aim:

The aim of this resource is to enhance your understanding of pricing in business. By the end, you should be able to:

• Identify the use businesses can make of demand analysis
• Understand different types of pricing policy that firms can adopt
• Identify and analyse how added value can affect price
• Understand how advertising can be used to differentiate products and charge premium prices

Resources:

• PowerPoint Presentation - Pricing Policies, Quality, and Adding Value [71 KB]

Activity:

In the battle for consumers' spending in the retail fashion market, we often wonder what justifies a three or four figure price tag. How can something designed for people to wear really be worth the value some retailers put on the item? Sometimes, though, the link between the price you pay and the cost of the raw materials can be clear. The BBC article Australian Sheep Spin Riches(http://news.bbc.co.uk/1/hi/world/asia-pacific/3529713.stm) looks at the richest herd of sheep in the world - one that has recently produced the most expensive bale of wool ever.

Contrast this to the way UK shoppers are often told that the food retailing industry (dominated by the supermarkets) is delivering what we demand of them, by way of lower grocery prices. A Friends of the Earth Press Release on Supermarket Mergers(http://www.foe.co.uk/resource/press_releases/20030113134910.html) brings this claim into question. It asks whether mergers in the industry really are good for consumers, as is often claimed.

Image copyright: Jelmer Rozendal, stock.xchng