Pricing Strategies, AIDA Model, Persuasive Techniques, and Advertising Appeals in Marketing
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Vocabulary Pricing
Penetration Pricing
When a company offers a limited-time discount and then raises the price. Examples: telephone agencies, insurance.
Premium Pricing
A strategy where a company prices its product higher than competitors. Examples: Apple, Ferrari.
Price Skimming
A strategy where a firm charges the highest initial price customers will pay and then gradually lowers it. Example: Apple lowers the price of previous iPhone models when they release a new one.
Captive Pricing
A strategy used for products with a core component and expensive accessories. Example: Printing machines are cheap, but the necessary accessories are expensive.
Predatory Pricing
The illegal act of setting prices low to eliminate competition.