marketing mix price igcse business studies zero four five zero create the igcse this is the syllabus for it we will learn about the pricing methods so there are different pricing methods first is cost plus pricing competitive pricing penetration pricing price skimming and promotional pricing we're going to look at each of these types of pricing methods and look at the advantages and disadvantages cost plus pricing is when the cost of producing the product which means the production cost is used for the pricing plus they will add the profit markup which means the amount of profit they need to make so they're going to add the cost of the product and the profit markup so the advantages of cost plus pricing is that this method is convenient and easy to use although they can lose sales if the selling price is a lot higher than the competitor's price competitive pricing is the product priced similarly to or just below the competitor's price so advantages is the sales are likely to be high as the price is competitive now competitive pricing is all about thinking and considering the competitors prices so you need to make sure that you grab the customer's attention and attract more sales so for that reason the sales might be likely to be high as the price is competitive then a disadvantage that is searching your competitor's price can take time which is basically market research can take time and can be expensive at times penetration pricing is when low price is put for a new product in order to attract the customers from the existing competitors products advantage is that they'll be useful it will if they're launching a new product into a new market then another one is that it ensures the product will be sold so that the product will enter the market although the advan the disadvantage is that the low price may create this assumption in the consumer's mind that this product is cheap and is of cheap quality and they may not want to purchase it price skimming is when a high price is set for a new product on the market so for your next for example it is apple uh phones for example so when the product is launched into the market the prices for the phones will be very high but as time passes it will get reduced now an advantage is that it can make people think that the product of this the quality of this product is expensive because it is of good quality so it they may have an assumption that you know it's an expensive product then a disadvantage is that the consumers may not buy the product because they can think that it's overpriced so here it is like they can be advantageous and can be disadvantaged it depends on the person buying it promotional pricing is when the product is sold at a low price for a short period of time so when there are sales in between that is they use the type of pricing method which is promotional pricing they sell their products for a low price for a short period of time this is useful when they want to clear their old stock so that the inventory costs are reduced and that way it will help increase efficiency in the business and also it will promote the business and disadvantage is that low sales revenue as the prices are low now since the prices of the product is low consumers will be paying less for buying that product so the profit and the sales revenue which the business earn is going to be low now this is the end of our topic if you want to check out igcse computer science videos of code 0478 you can check out the channel code 4 programming do subscribe and share the link will be in the description below thank you for watching crazyrgcse please do subscribe like and share