The candidates are expected to show knowledge of customer expectations.
Correct ideas include:
• How much a customer is willing to pay – this is determined by customer profile and
disposable income. Price may be set in line with target market profile.
• Customer assessment of brand – they may expect to pay the price associated with the
quality of the brand/concept of value for money. Price may be set in line with usual range
for brand.
• Customer expectations can be linked to global factors – customers may expect to pay
less in a recession – prices may be lowered.
Use levels of response criteria:
Level 1 (1–3 marks) At this level candidates will identify 1, 2 or more examples/features of
customer expectation or examples of pricing policy or examples of other factors
Level 2 (4–6 marks) At this level candidates will 1, 2 or more reasons why customer
expectation has an impact on pricing policy chosen.
Level 3 (7–9 marks) At this level candidates will evaluate the importance of customer
expectation as a pricing policy determinant. Other aspects may be considered in relation to
customer expectation for example competitors charges; seasonality; subsidies; fixed costs.
For 8/9 marks a reasoned conclusion or judgement should be evident.
Credit all valid reasoning in context.