Marketing - Price
Price is the amount of money charged for a product or service or the value exchanged for the benefits of the product or service.
For a new product, you must understand your positioning before you set a price. Make sure it is not too low, or the product will not be taken seriously. If it is too high, the potential customer will not take the risk.
Pricing Strategies
There are five general pricing strategies:
Product Line: Setting price steps between product line items
Optional Product: Pricing optional or accessory products
Captive Product: Pricing products that must be used with the main product
By-Product: Pricing low value by product to get rid of them
Product Bundle: Pricing bundles of products sold together
New Product Pricing
There are two new product pricing strategies:
Market-Skimming: Initially set high prices to "skim" revenue layer by layer from the market. Works when:
Quality and image support the higher price Enough buyers want the product at that price Cost of producing a small volume cannot be high Competitors should not be able to enter the market easily Market Penetration: Set a low initial price in order to penetrate the market quickly and deeply to win a large market share. Works when: Market is highly price sensitive Production and distribution costs fall as sales volume increases Low price must help keep out the competition Price Adjustment The following are price adjustments based on changing situations:
Discount & Allowance: reduced prices to reward customer responses such as paying early or promoting the product
Discriminatory: adjusting prices to allow for differences in customers, products, and locations
Psychological: adjusting prices for psychological effects. Ex: $299 vs. $300
Value: adjusting prices to offer the right combination of quality and service at a fair price
Promotional: temporarily reducing prices to increase short-run sales
Geographical: adjusting prices to account for geographic location of customer.
Meet Amarendra Bhushan, A leading Strategic Human Resource Consultent, MBA from American university of athens, greece, also editing The European journal of NRI finance magazine TRIBUNE).
As one of the leading article writer, and corporate hotel professional. Advisor to various organizations and hotels. He is an elected member of south Indian hotel and restaurant federation. Now staying at city of Athens Greece.
Amarendra bhushan Dhiraj
Athens, Greece
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