Business GCES OCR
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Business-Enterprise-And-Entrepreneurship ocr2 主题
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Business-Planning ocr2 主题
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Business-Ownership ocr4 主题
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Business-Aims-And-Objectives ocr1 主题
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Stakeholders-In-Business ocr2 主题
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Business-Growth ocr1 主题
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The-Role-Of-Marketing ocr1 主题
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Market-Research ocr5 主题
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Market-Segmentation ocr1 主题
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The-Marketing-Mix ocr12 主题
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Introduction-To-The-Marketing-Mix
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Product-The-Product-Life-Cycle
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Product
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Price
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Price-Methods-Of-Pricing
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Price-Applying-Pricing-Methods
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Place-Physical-Distribution
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Place-Digital-Distribution
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Promotion-Advertising
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Promotion-Point-Of-Sale-Methods
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Promotion-Using-Social-Media
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The-Integrated-Marketing-Mix
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Introduction-To-The-Marketing-Mix
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The-Role-Of-Human-Resources ocr1 主题
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Organisational-Structures ocr2 主题
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Different-Ways-Of-Working ocr1 主题
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Communication-In-Business ocr3 主题
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Recruitment-And-Selection ocr3 主题
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Motivation-And-Retention ocr1 主题
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Training-And-Development ocr2 主题
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Employment-Law ocr1 主题
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Production-Processes ocr2 主题
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Quality-Of-Goods-And-Services ocr1 主题
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The-Sales-Process-And-Customer-Service ocr2 主题
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Consumer-Law ocr1 主题
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Business-Location ocr1 主题
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Working-With-Suppliers ocr1 主题
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The-Role-Of-Finance ocr1 主题
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Sources-Of-Finance ocr2 主题
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Revenue-Costs-Profit-And-Loss ocr4 主题
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Break-Even ocr2 主题
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Cash-And-Cash-Flow ocr2 主题
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Ethical-And-Environmental-Considerations ocr2 主题
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The-Economic-Climate ocr1 主题
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Globalisation ocr3 主题
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Interdependence-Of-Business-Functions ocr1 主题
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The-Impact-Of-Risk-And-Reward-On-Business-Activity ocr1 主题
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Financial-Information-And-Business-Performance ocr1 主题
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Paper-1-Business-Activity-Marketing-And-People ocr2 主题
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Paper-2-Operations-Finance-And-Influences-On-Business ocr2 主题
Price-Applying-Pricing-Methods
Exam code:J204
Choosing an appropriate pricing method
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A business needs to consider various factors when determining which pricing methods it will use
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Understanding these factors can help a business make informed decisions about its pricing and increase its chances of success
Factors to consider when selecting pricing methods
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Factor |
Explanation |
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Number of USPs/ |
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Technology |
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Nature of the market |
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Strength of the brand |
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Stage in the product life cycle |
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Costs and the need to |
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Many retailers have had to adjust their pricing methods to remain competitive in an online marketplace
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Customers are increasingly able to use online tools to compare prices, e.g www.comparethemarket.com
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Pricing has changed to reflect the rise of price comparison through the use of price matching policies
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Some retailers offer to match the prices of their rivals in order to prevent customers from switching to a competitor with a lower price
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Examiner Tips and Tricks
In the exam, you may be asked to analyse the benefits or drawbacks of a particular pricing method. In your analysis, you should try to develop a chain of reasoning that makes a valid point and considers consequences. You must also remember to include references to the context to score top marks.
Case Study
Bilberry Organics Limited sells and delivers British-grown seasonal vegetable boxes to mail-order customers in the London area.
Its loyal customers tend to be time-poor, high-income, ‘green’ consumers who value convenience and quality.
It operates in an increasingly competitive market, with three new competitors emerging in recent months and the expansion of fresh product ranges in local supermarkets.
The business has significant costs, as it runs three large farms on the outskirts of the city and is committed to paying its workers high wages. It delivers only the best quality products to customers, and operates a small fleet of electric delivery vehicles that allow products to be delivered directly to their customers’ front doors.
The managing director is keen to change from its current price skimming strategy. She has identified two suitable alternative pricing strategies:
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Cost-plus pricing
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Competitive pricing
Recommendation
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Both strategies could be appropriate for an established business like Bilberry Organics Ltd
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Cost-plus pricing would ensure that Bilberry Organics Ltd’s significant costs would be covered and a profit generated
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Competitive pricing would mean that the business would be in a better position to maintain market share in an increasingly competitive market
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Overall, it has loyal customers who have high incomes. They are likely to value Bilberry Organics Ltd’s service for its convenience and high quality products, delivered in an environmentally friendly way. These customers are unlikely to be swayed by lower-priced competition. Setting prices to match rivals’ may therefore not be necessary, especially as their customers may lack the time to shop in supermarkets.
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Cost-plus pricing is therefore likely to be the most logical strategy
Responses