Competition Typeit

The mix is a combination of three elements: function, aesthetic and cost.

means how well the product works.  This mean mean its reliability or durability, or it could mean how well it performs. For example, similar cars such as Fords and Vauxhalls are often compared by their BHP or fuel economy statistics.

means how well the senses respond to the product.  The design of the product should take into account how the product smells, tastes, feels, sounds and .  Good design will look at the appearance of the product and add elements of elegance or charm to make the product more differentiated from the competition or to add value in some way.  For example Lamborghini and Ferrari cars are more aesthetically .

means the economic manufacture or production of the product. A low production cost will mean competitive advantage for a business, which will be able to pass savings on to customers, making the product more appealing. This will increase sales levels and market share. It will also have a positive impact on .

There are lots of different pricing strategies that a business can use and they depend on many factors and the competitive environment that the business trades in.

pricing is where a product price is set which covers the cost and provides the business with a specific profit margin. This is the most logical approach to pricing as it ensures that a profit is made. For example pizza takeaway prices are based on the costs of the business, plus the costs of the pizza plus a profit percentage. 

 is used when a new product is being launched.  This often applies to high-technology products, where high research and development (R&D) costs need to be recouped. For example new Xbox games can cost millions to be developed so will be priced high at launch; the products are unique and so businesses can afford to charge the higher prices as the demand is inelastic. 

pricing means setting prices low on new products to encourage customers to try the product and when they like the product and start to repeat purchase the price will return to normal.  For example many new fast-moving consumer goods (FMCG) are priced this way to gain more market share on entry. This is important in markets where there are many similar substitutes and demand is elastic. 

pricing means aggressive price-cutting to prevent a new company from entering the market, forming a barrier to entry. This tactic depends on the financial strength of the business to be able to take the profit reduction.  For example the budget airline market is highly competitive and often uses predatory prices to prevent new airlines from gaining market share.

pricing means pricing in line with other companies in the same market. This means customers will be forced to judge the products on non-price factors such as taste.  The confectionery market in the UK is a good example of this. 

pricing means pricing the goods at, for example, £1.99 rather than £2.00 to appear cheaper. Some companies charge higher prices as price can signal in some markets; for example, luxury cars. A cheap sports car would raise suspicion with customers and they are reassured by the higher price tag.