Lesson Two

This lesson in business finance management we learnt about pricing strategies. To do this we focused on the pricing of magazines and the advantages and disadvantages of the different types of pricing strategies.

The magazines that we used to look at pricing strategies are:

• Girlfriend $5.70
• Dolly $5.30
• Woman's Day $4.50

The different types of marketing strategies that we learnt about in class today are competitive, penetration and plus.

Competitive pricing is when you have lower prices than your competing stores so that you can win over customers. eg. coles and woolworthes.

Penetration is when you put your product on a very cheap price to start with to that you can get customers attention, once they like your product and continue to purchase it, you raise the price. They will continue to purchase your product despite the raise in price because they have become familiar with its use and know it is reliable.

Cost plus is when companies sell goods for only the amount it took to produce it plus cost plus. eg. pen cost $2.00 to make but sold for $2.50. therfore 50 cents cost plus.