Definition: Price is the value that is put to a product or service and is the result of a complex set of calculations, research and understanding and risk taking ability. A pricing strategy takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst others.
Then, what are the different types of pricing strategies?
Here are some of the various strategies that businesses implement when setting prices on their products and services.
- Pricing at a Premium. With premium pricing, businesses set costs higher than their competitors.
- Pricing for Market Penetration.
- Economy Pricing.
- Price Skimming.
- Psychology Pricing.
- Bundle Pricing.
What is a premium pricing strategy?
Premium pricing. From Wikipedia, the free encyclopedia. Premium pricing (also called image pricing or prestige pricing) is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price.
What are the three goals of pricing?
The main goals in pricing may be classified as follows:
- Pricing for Target Return (on Investment) (ROI):
- Market Share:
- To Meet or Prevent Competition:
- Profit Maximization:
- Stabilise Price:
- Customers Ability to Pay:
- Resource Mobilisation: