What Is Pricing Strategy?
Certain ways are existing in market for marketer to price a product. All of the strategies of pricing are followed in order to evolve a favorable scenario of pricing in the eyes of consumers. There is a need of deciding best of the best policies to apply in various situations.
in Premium pricing a marketer set comparatively higher price for the unique characteristics of the potential product in the market. Such products charge more for two reasons one is for having competitive edge and second is they charge for luxurious items like Lexus car.
Penetration pricing where prices are kept lower as compared to the competitors prices in order to penetrate in the market and to create trial and awareness of your product in the market. The purpose is to gain market share.
Economy pricing that involves keeping low prices of the products and there is no consideration of the cost that is associated with the manufacturing and marketing expenses of the products.
Skimming Pricing in which marketers aims for maximizing profit level, increases the prices and keep them higher .He does so after gaining enough market share and substantial competitive advantage an to attract new customers.
Another important approach to pricing is Psychological Pricing. This approach is used by the marketer when he want his customers to respond on their emotional mode as if some marketers keep the prices not as a whole number but like 99$ or 1999$.so they utilize the tricky ways and psychological behaviors and variables help them.
Product Line Pricing
When marketers is offering wide variety and range of products and services and place price tags on them as reflecting their benefits of parts.
Optional Product Pricing
Optional product pricing, is followed when marketer wants his customer to pay more than his usual spending. Like it associate the ‘extra’ element with the whole product in order to increase the value of product and the customer perceives it as an additional benefit.
Geographical Pricing is evident in the situation when the prices differ in different parts of the world. May be the shipping costs or currency up down makes the difference.
Captive Product Pricing
Captive product pricing, which is an interesting strategy, the marketers follow in the situation when the product has compliments. For example, printer manufacturer companies earn less on the sale of printer but make decent profits on the sale of its cartridge. (Morris, Pg 222, 1995)
Morris Engelson, (1995), Pricing strategy: an interdisciplinary approach, Joint Management Strategy, page 222