Marketing Mix Pricing Strategy

Going Rate This pricing strategy is more common in selling environments where the companies have little to no control of the market price. · Skimming You ... SkiptocontentPriceistheamountofmoneythatyourcustomershavetopayinexchangeforyourproductorservice.Determiningtherightpriceforyourproductcanbeabittricky.Acommonstrategyforbeginningsmallbusinessesiscreatingabargainpricingimpressionbypricingtheirproductlowerthantheircompetitors.Althoughthismayboostinitialsales,lowpriceusuallyequatestolowqualityandthismaynotbewhatcustomerstoseeinyourproduct.Yourpricingstrategyshouldreflectyourproduct’spositioninginthemarketandtheresultingpriceshouldcoverthecostperitemandtheprofitmargin.Theamountshouldnotprojectyourbusinessastimidorgreedy.Lowpricinghindersyourbusiness’growthwhilehighpricingkicksyououtofthecompetition.Thereareanumberofpricingstrategiesthatyoucanfollow.Somestrategiesmaycallforcomplexcomputationmethodsandothersareintuitivedecisions.Selectapricingstrategythat’sbasedontheproductitself,competitiveenvironment,customerdemand,andotherproductsthatyouoffer.CostPlusCostPlusistakingtheproductioncostandaddingacertainprofitpercentage.Theresultingamountwillbetheproduct’sprice.Youneedtoconsidervariableandfixedproductioncostsforthispricingmethod.ValueBasedInsteadofusingtheproductioncostasyourbasis,youconsiderthecustomer’sperceptionoftheproduct’svalue.Theperceptionofthebuyerisdependentontheproduct’squality,thecompany’sreputation,andhealthfulness,asidefromthecostfactors.CompetitiveYoutakeasurveyofthepricingimplementedbyyourcompetitorsonasimilarproductthatyouaretryingtomarketandthendecidewhethertopriceyourproductlower,thesame,orhigher.Youshouldalsomonitortheirpricesandbeabletorespondtochanges.GoingRateThispricingstrategyismorecommoninsellingenvironmentswherethecompanieshavelittletonocontrolofthemarketprice.YoupriceyourproductaccordingtothegoingrateofsimilarproductsSkimmingYouintroduceahighqualityproduct,priceithigh,andtargetaffluentcustomers.Whenthemarkethasbecomesaturated,youthenlowerthepriceaccordingly.DiscountMostcommonlyusedforoldproductstocksorwhenyou’reclearingupyouinventory.Youtaketheadvertisedpriceandlowertheamount.Agoodexampleisadiscountcoupon.LossLeaderYoutaketheproductioncostandpricetheproductevenlower.Theideaistoattractyourcustomerstoyourstorewheretheycanbeconvincedtobuyyourotherproducts.PsychologicalYoumayhavenoticedthatyourarelyseepricingroundedofftothenearestwholenumber.Thisisapsychologicalpricingstrategy.$5.99looksmoreattractivethan$6.00althoughyou’reonlysavingasinglecent.Theactualmoneyyouwillreceiveaspaymentforyourproductcanbecomplicatedbycertainpricingfactorssoyoumayreceivemoreorlessthantheadvertisedprice.Youneedtodeterminethefollowingincomingupwiththeappropriateprice:PaymentPeriodThisisthelengthoftimebeforeyoureceivethepayment.AllowanceYougivepartoftheadvertisedpricetotheretailerinreturnforpromotionalactivitieslikein-storedisplaythatfeaturesyourproduct.SeasonalAllowancesYoulowerthepriceofcertainproductsorderedduringlowsaleseasonstoattractcustomerstobuyduringnon-peaktimes.Product/ServicesBundlesYouputinsimilarordissimilarproductstogetherandsellthemasabundleatadiscountedpriceTradeDiscountsYougivepricediscountsaspaymentstoyourdistributionchannelsfordoingtaskslikeshelfstockingandwarehousing.PriceFlexibilityYoulettheresellerorthesalespersonmodifythepriceaccordingtoanagreedrange.VolumeDiscountsYougivediscountsforwholesalebuyers.CreditTermsYouallowconsumerstopayforyourproductsatalaterdate.Baseyourpricingstrategyonthemethodsmentionedabovetocomeupwiththeproperpriceforyourproduct.RememberthatPriceistheonlyPinthe‘FourPsofMarketing’thatactuallygeneratesprofitforyou.Therestarecostincurringfactors.Continueto4P's–Promotion Postnavigation←PreviousPostNextPost→ 10thoughtson“MarketingMix–Price(PricingStrategy)”verygoodarticle,verynice ReplyThankyou!!🙂 ReplyPingback:Howimportantismobileasamarketingtool?–212advPingback:Howimportantismobileasamarketingtool?|MAAWhatistheconnectionofpricingstrategywiththemarketingmix? ReplyHowitaffectsthecustomerandthebusinesswhenyouincreasethepriceofaproductwhileyoudidnotiproveit’squality? ReplyThankyouforthefeedback,IwillbeaddressingthissoonintheMarketingMixupdates. ReplyWherecanIfindit? ReplyBONCONSEIL Replygoodbutnotsimple ReplyLeaveaCommentCancelReplyYouremailaddresswillnotbepublished.Requiredfieldsaremarked*Typehere..Name*Email* ΔMENURecentPosts New4PsOfMarketing S.A.V.EMarketing–UpdateToThe4P’s&7P’s StudentCreditCards MarketingMixExample MarketingMix–Convenience MarketingMix–Product 4PsinMarketing TheMarketingMix WhatIsMarketingMix? 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