Pricing Strategies, AIDA Model, Persuasive Techniques, and Advertising Appeals in Marketing

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.

Loss Leadership Pricing

Involves selling one or more products below cost to attract customers.

Discriminatory Pricing

The seller charges each customer the maximum price they are willing to pay.

Competitive Pricing

A product's price is set in line with competitor prices.

AIDA Model

Describes the effects during the buying process for a product or service.

• A: Awareness
• I: Interest
• D: Desire
• A: Action

Persuasive Techniques

Ethos

Persuading by establishing trustworthiness, often using an expert, testimonial, or celebrity endorsement.

Pathos

Persuading by evoking emotions such as sadness, happiness, or anger.

Logos

Persuading through logic and reason, often using facts, statistics, charts, and graphs.

Advertising Appeals

Endorsement

Using celebrities or credible figures to endorse products, aiming to convince consumers that people they trust use and recommend the product.

Scarcity

Creating a sense of limited availability to encourage immediate purchase.

Pain-Solution

Highlighting a problem and presenting the product as the solution.

Contrasting

Differentiating a brand by comparing it to competitors or showcasing how life would be without the product. Example: IKEA.