Match these different pricing models to the definitions.

1. captive product pricing   2. economy pricing   3.geographical pricing   4. penetration pricing   5. premium pricing   6.price skimming

a pricing goods/services as cheaply as possible   b charging a high price for an item where   c you have a competitive advantage   d charging a high price for unique high-quality item   d pricing goods at a very low price to encourage people to buy them-often the prices that are later raised   e pricing according to area where goods are sold   f pricing one item very low and its complement very high

Now decide which model is being discussed.

9. Study these terms used to talk about pricing:

Now use the words to complete the sentences below.

1. 'Looking at the competition, €25/ month seems to be the ………………. 1. It's what most people are charging.''

2. We can sell the modems for €100 each. They only cost €20 in total to produce and distribute, so we would have a healthy ……………………. 2 of €80.'

3. '€59.99 is a good ………………. 3. We can suggest that stores sell it for that much, but if they want to use it as a loss leader and sell it for less, then that's fine too.'

4. 'What I'm afraid of is an all-out ………………..4, when our company and the competition are all fighting for the same customers. We don't want to cut our prices so low that we go out of business.'

5. 'We need to establish our ………………..5. When does the amount we're earning cover our costs?'

6. 'Luckily, we have low ………….. 6. Our rent is very low, and we got a great deal on our office equipment.'

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