Cambridge IGCSE Business (0264) syllabus reference: 3.3.2
| Method | Meaning | Advantages | Disadvantages |
|---|---|---|---|
| Cost-plus | Cost per unit plus a fixed percentage mark-up | Simple; covers costs | Ignores competitors and demand |
| Competitive | Price set at or near competitors' prices | Avoids price wars; easy | Profit may be low if costs are high |
| Penetration | Low price to enter a market, raised later | Attracts customers quickly; builds market share | Low profit at first; customers may resent price rises |
| Skimming | High price for a new or unique product, lowered later | High profit early; quality image | Attracts competitors; few buyers at first |
| Dynamic | Price changes with demand at the time | Fills spare capacity; higher price when demand is high | Customers may feel it is unfair |