Answer to Question #294706 in Marketing for Ruth

Question

Strategies of Price

Answer 1

Pricing strategies refer to the processes and methodologies businesses use to set prices for their products and services. If pricing is how much you charge for your products, then product pricing strategy is how you determine what that amount should be.

The strategies of price include;

Value-based pricing

With value-based pricing, you set your prices according to what consumers think your product is worth. 

Cost-plus pricing 

Here, you just take the product production cost and add a certain percentage to it.

Economy pricing 

This strategy is popular in the commodity goods sector. The goal is to price a product cheaper than the competition and make the money back with increased volume. 

Competitive pricing

When you use a competitive pricing strategy, you're setting your prices based on what the competition is charging.

Penetration pricing

In highly competitive markets, it can be hard for new companies to get a foothold. One way some companies attempt to push new products is by offering prices that are much lower than the competition.