Syllabus: Pearson - A Level Business
Module: 1.3 Marketing mix and strategy
Lesson: 1.3.3 Pricing Strategies

Introduction

This article focuses on the Pearson Edexcel A Level Business syllabus, specifically Theme 1, Topic 1.3.3: Pricing strategies—a core element of the marketing mix. As outlined in the Pearson specification, students must understand how pricing affects market positioning and business performance. Teaching this well isn’t just about theory. It’s about helping students explore the commercial consequences of pricing decisions—linking classroom learning to real business behaviours.

This guide supports teachers, SLT, and curriculum leads by providing an approach that’s aligned, classroom-ready, and enriched with real-world context and enterprise thinking.

Key Concepts

Students need to grasp:

• The main pricing strategies: cost-plus, price skimming, penetration pricing, predatory pricing, competitive pricing, and psychological pricing.

• Factors influencing pricing decisions, including:

  • Costs

  • Market structure and competition

  • Demand and elasticity

  • The product lifecycle

  • Brand strength and positioning

• The link between pricing strategy and business objectives (e.g. market share vs profit maximisation).

• The role of pricing in the broader marketing mix and competitive strategy.

It’s also important for learners to understand how pricing decisions change over time and respond to market shifts—a valuable stepping stone into later units on strategy and external influences.

Real-World Relevance

Whether it’s Netflix tweaking subscription tiers or Apple launching a premium device at a luxury price point, pricing isn’t static. It’s strategic.

Example 1: When Pret A Manger trialled lower pricing for drinks via their subscription model, it was a form of penetration pricing—designed to build customer loyalty and footfall post-COVID.

Example 2: In the competitive UK supermarket sector, Aldi and Lidl use everyday low prices to position themselves as value leaders, while Waitrose justifies higher prices with brand equity and service.

These examples aren’t just relevant—they’re accessible. Students interact with pricing every day. Building in these references makes abstract ideas concrete.

How It’s Assessed

In the Pearson A Level Business qualification:

• Questions on pricing strategies may appear in Theme 1 (Paper 1) or Theme 1 & 4 synoptic (Paper 3).

• Typical question types include:

  • Data response and case study analysis

  • 8- and 10-mark analyse questions

  • 12- or 20-mark evaluation questions

Command words to prioritise:

• Analyse – Students must build chains of reasoning, showing how pricing impacts objectives or market performance.

• Evaluate – They’ll need to weigh up pricing choices, often in the context of external data or competing priorities.

• Recommend/Justify – This appears in scenario questions where students must propose a pricing strategy and back it up.

Examiner feedback regularly highlights that stronger responses use applied examples and avoid generic statements.

Enterprise Skills Integration

Pricing strategies are an ideal springboard for decision-making, problem-solving, and commercial awareness:

• Decision-making: Students weigh up competing strategies using data (e.g. cost structures, elasticity estimates).

• Risk assessment: Skimming vs penetration forces them to think like business leaders—balancing risk, reward, and positioning.

• Numeracy and data fluency: They apply calculations (e.g. mark-up, break-even) and interpret market data.

Enterprise Skills’ Business Simulations align perfectly here. Students get to test out pricing strategies in a controlled, consequence-driven environment. It’s active learning, not hypothetical analysis—and that makes the concepts stick.

Careers Links

Pricing is embedded in multiple business roles, making it rich for Gatsby Benchmark alignment:

• Marketing Analyst – interpreting data to guide pricing.

• Product Manager – setting prices that reflect brand and lifecycle.

• Entrepreneur – making pricing decisions that impact cash flow and competitiveness.

• Finance roles – using cost data to influence pricing models.

Skills developed here also map directly to broader employability: communication, critical thinking, and data literacy. These are career-readiness essentials.

Teaching Notes

Practical activities that work:

• Use branded products to compare and contrast pricing strategies.

• Run “boardroom decision” tasks where students pitch a pricing strategy for a new product.

• Use Enterprise Skills’ plug-and-play simulation modules to turn pricing into lived experience.

Common misconceptions:

• Students often confuse cost-plus pricing with profit maximisation—clarify that cost-plus doesn’t respond to market dynamics.

• “Cheaper is better” thinking needs challenging—use luxury brands or price skimming examples to reset this.

Stretch and support:

• Use elasticity calculations to support quantitative skills.

• Extend higher learners with case comparisons across industries.

• Scaffold for mixed ability with structured frameworks for evaluation.

Assessment tip:
Encourage students to use context-specific justification. Saying “penetration pricing is good for new markets” is too generic. Ask, “why this strategy, in this market, for this objective?”