Price and Promotion

This lesson covers the Price and Promotion elements of the marketing mix within AQA A-Level Business topic 3.3.4. You will study key pricing strategies — including penetration pricing and price skimming — the role of branding, and the growing importance of social media and viral marketing in promotional strategy.

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Pricing Strategies

Key Definition: A pricing strategy is the approach a business takes to setting the price of its products. The strategy should be consistent with the firm's marketing objectives, target market, and competitive position.

1. Penetration Pricing

Key Definition: Penetration pricing involves setting a low initial price to enter a market quickly, attract customers, and build market share. The price may be raised once a sufficient customer base has been established.

Aspect	Detail
Objective	Gain market share rapidly; attract price-sensitive customers; discourage new entrants
When used	Entering a new market; launching a new product in a competitive market; when economies of scale are available
Risk	Low prices may signal low quality; difficult to raise prices later without losing customers; may trigger a price war