G10 T1 Methods of Pricing

• Business Studies
• Secondary Education

Thursday, 23rd October 2025

3,571 sparkling diamonds (totalling 38.55 carats), topaz, pearls, 18 karat gold 2479.26 grams and 5892.88 grams pure silver, SHUMUKH is the epitome of luxury.

finest natural ingredients sourced from the furthest corners of the globe, culminating in a scent that is as unforgettable as it is mesmerising with notes of amber, sandalwood, musk, rare pure Indian agarwood, pure Turkish rose, patchouli ylang-ylang and frankincense that are estimated to last on the skin for more than 12 hours.

Can you guess the price of this perfume?

1. 18,000 AED
2. 58,000 AED
3. 1,800,000 AED
4. 4,800,000 AED

3500 diamonds

18kt gold

wordwall.net

product shortages- demand

supply disruptions

the pandemic caused bottlenecks in shipping - disrupted supply chain

the flow of goods from one country to another

b.socrative.com

Why did the price of products increase straight after the pandemic?

straight after the pandemic

Cost-plus Pricing

Add a % to the total cost of making the product.

Example: An accessories store in Ajman adds 30% profit on handbags. 

• Advantage: Easy to calculate and ensures profit.

• Disadvantage: Ignores competitors and customer demand.

Competitive Pricing

Set price similar to competitors.

Example:  Masafi checks Nestle's prices before setting their own.

• Advantage: Keeps business competitive.

• Disadvantage: Profit may be low if competitors lower prices.

We can use competitive pricing for businesses with many competitors, for example mobile phones.

1. true
2. false
4. -

 Price Skimming

Start with a high price, then lower it later.

Example:  New iPhones launch at high prices, then drop.

• Advantage: High profits at the start; builds excitement.

• Disadvantage: Sales drop when demand starts to  decrease.

4,299 AED < 3,799 AED

When does the business lower the price in the price skimming method?

1. When there is high demand at the beginning.
2. When there is very low demand.
3. When demand starts to decrease (less).

 Promotional Pricing

Temporary discounts or offers.

Example:  Buy 1 Get 1 Free during UAE National Day.

• Advantage: Increases sales quickly; attracts new customers.

• Disadvantage: Can reduce profit; customers may wait for offers.

Promotional pricing is used for a specific amount of time and is useful to gain new customers.

1. true
2. false
3. -
4. -

 Premium Pricing

High price to show luxury or quality.

Example:  Bentley, Rolex, Shumukh, Hermes

• Advantage: Builds strong brand image.

• Disadvantage: May lose price-sensitive customers.

An advantage of premium pricing is it is exclusive, so it does not help to build the image of the brand.

1. true
2. false
3. -
4. -

Work in a group. 

Your group owns a business in Dubai mall. 

Choose your business from your teacher. 

Complete the questions together; the questions get more difficult. 

Group Activity

Pricing methods:

Group Activity

• cost-plus pricing
• competitive pricing
• price skimming
• promotional pricing
• premium pricing  

Match the pricing strategies to their meaning. 

play.blooket.com

www.quizlet.live

I can...
1. Identify the methods of pricing
2. Recognize the advantages and disadvantages of each method.

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