Syllabus: SQA - Higher Course Spec Business Management
Module: Management of Marketing
Lesson:Price

Introduction

This lesson on “Price” falls within the “Management of Marketing” unit in the SQA Higher Business Management course. It’s where classroom theory meets commercial reality. Students explore how pricing strategies influence consumer behaviour and organisational success—core knowledge for future business professionals and a crucial part of the SQA assessment framework.

Price is more than a number. It reflects positioning, market dynamics, and business objectives. Teaching this topic helps students connect abstract economic ideas to recognisable actions in retail, tech, and services sectors.

Key Concepts

As per the SQA specification, students should understand:

• The role of price in the marketing mix: alongside product, place, and promotion.

• Different pricing strategies, including:

  • Cost-plus pricing: adding a markup to the cost.

  • Competitive pricing: matching or undercutting rivals.

  • Penetration pricing: low price to enter a market.

  • Price skimming: high initial price to maximise early profit.

  • Promotional pricing: temporary reductions.

  • Psychological pricing: pricing that ‘feels’ right to the customer.

• Factors influencing pricing decisions:

  • Market demand and elasticity

  • Competition

  • Costs of production

  • Brand image

  • Product life cycle stage

These ideas build students’ ability to analyse business decisions and consider strategic outcomes in dynamic markets.

Real-World Relevance

Look at Apple’s initial high pricing of new iPhones (price skimming) or budget airlines using dynamic and competitive pricing to fill seats. These aren’t just abstract tactics—they shape daily buying decisions and company performance.

Closer to home, supermarkets adjusting prices in response to inflation or promotional pricing over key shopping seasons give students relatable, live examples.

Bring in student-led research: how does the same product vary in price across brands or stores, and why? This kind of grounded investigation gives pricing strategy a personal, practical edge.

How It’s Assessed

In SQA Higher Business Management, price-related content is assessed through both paper-based questions and the assignment.

• Question types include:

  • Explain (e.g. “Explain one reason a business may use psychological pricing.”)

  • Compare (e.g. “Compare cost-plus and competitive pricing.”)

  • Justify (e.g. “Justify a suitable pricing strategy for a new business entering the market.”)

  • Scenario-based application (e.g. analysing a case study and recommending a strategy)

Students must apply theory to context—marking rewards not just recall but reasoned, relevant answers.

Enterprise Skills Integration

Teaching pricing develops key enterprise skills:

• Decision-making: weighing pros and cons of pricing strategies.

• Problem-solving: adapting strategy based on constraints like market competition or production costs.

• Communication: justifying pricing approaches clearly in both writing and discussion.

• Numeracy: calculating markups, break-even points, or pricing thresholds.

You can extend this with budgeting simulations or pitch projects where students must price a product and justify their approach.

Careers Links

Pricing strategy sits at the heart of roles such as:

• Marketing Executive (Gatsby Benchmark 4 and 5)

• Retail Manager

• Financial Analyst

• Entrepreneur / Start-up founder

• Product Manager

This unit also lays the foundation for further study in business, economics, and marketing—giving students insight into real-world career paths and decision-making tools used daily in industry.

Teaching Notes

What works:

• Use real product examples to spark discussion.

• Break pricing strategies into case studies—students apply the strategy to a context.

• Set up a ‘dragons’ den’ style activity where groups pitch a product and justify pricing.

Watch out for:

• Confusion between pricing strategies and tactics—repetition helps.

• Over-simplifying strategy selection. Push students to justify, not just name, a strategy.

• Ignoring elasticity—introduce the idea with simple scenarios (e.g. chocolate vs mobile phones).

Extension activities:

• Student-created pricing surveys (e.g. how much would people pay for a school snack).

• Comparison of pricing across brands with class-led analysis.

• Link to ethics: is price discrimination ever justified?