Deciding how much to charge for a product or service requires more thought than merely calculating the costs and adding a mark-up.
Pricing strategies and methods often prove to be extremely complex and intense as it includes a number of calculations, research work, risk-taking ability, and understanding of the market and the consumers. The top management of the company considers a number of factors before pricing a product. This includes the ability of a consumer to pay for the products, the segment of the product, the action of the competitor, the conditions of the market, the production and the raw material cost or the cost of manufacturing, and the margin or the profit margins. An effective pricing strategy helps to identify competitive prices for a product or service.
Adopting a competitive pricing strategy also depends on whether the company wants to achieve operational efficiency or product leadership. If the company’s value proposition is operational efficiency, then they need to follow a highly competition-based pricing tactic. On the other hand, if the company’s value proposition is product leadership or customer intimacy, the offerings need to be priced on the higher end when compared to similar products in the market. This gives the customers a feeling of uniqueness and loyalty to the brand. This blog from Infiniti Research curates some of the top pricing strategies in marketing that our industry experts feel are most relevant in today’s business scenario.
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What are the new pricing strategies in marketing?
Product pricing strategies in marketing are of great importance. In fact, pricing strategies are a key element for the success of the company’s marketing strategy. The right pricing methods will help a company to achieve its ultimate goal. Here are some of the most sought-after global pricing strategies in marketing:
Penetration pricing
Such pricing methods are generally used by companies in order to enter a market and to gain a good market share. Some companies either choose to provide a few services for free or keep a low price for their products for a limited period. This is one of the pricing strategies in marketing that is used by companies only in order to set up their customer base in a particular market.
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Economy pricing
The is one of the most widely used pricing strategies in marketing where the promotion and the marketing cost of a product are kept to a minimum. Economy pricing is set for a certain period of time wherein the company decides to not spend more on promoting the product and service.
Psychological pricing
Psychological pricing strategies include gathering the consumer’s emotional response instead of his rational response. For most consumers price is an indicating factor for whether to buy a product or not. Even if the market is unknown to the consumers, they will still use price as a factor to purchase a particular product or service offering. Psychological pricing strategies in marketing products to price-conscious customers can often prove to be highly effective. Request more info to gain detailed insights.
Promotional pricing
Promotional pricing is one of the most popular pricing strategies in marketing today. It can be found almost everywhere. Promoting a product through its pricing is another very useful and helpful strategy. These pricing methods can include, discount offers, gift or money coupons, or vouchers that are used to promote new or even existing products. Though an old strategy, yet it is one of the most successful pricing strategies that are available today.
Final thoughts
The management of the company must price their products and services effectively if they do not want to enter into any situation where their sales take a hit due to the relatively high price when compared with their competitors. The company should also ensure that they do not keep a price too low to maximize profits or enter into losses. Hence pricing strategies must be formulated very smartly and effectively by ensuring that the management of the organization considers every aspect before they price a product
Pricing strategies are key to staying ahead in today’s competitive marketplace. Get in touch to know more about Infiniti’s price analysis solutions and their benefits.
