NovaPulse is launching a smartwatch with new health-monitoring technology. Development cost £3.6 million. Research shows two possible segments: technology enthusiasts willing to pay up to £340 and students interested only if the price is below £190.
Option 1: Use price skimming and launch at £329
Option 2: Use penetration pricing and launch at £179
Justify which one of these two pricing strategies NovaPulse should use.
36 exam-style questions on Edexcel GCSE Business 2.2 Making marketing decisions, covering 2.2.1a The design mix, 2.2.1b The product life cycle, 2.2.1c Product differentiation, 2.2.2a Pricing strategies, 2.2.2b Influences on pricing strategies, 2.2.3a Promotion strategies for market segments, 2.2.3b The use of technology in promotion, 2.2.4 Place, 2.2.5a How marketing mix elements interact, and 2.2.5b The integrated marketing mix and competitive advantage. Each one has a worked solution and a mark scheme showing where the marks go.