This post mainly focuses on Pricing Methods and Strategies in Marketing to decide the Price of Products and Services. These pricing methods and strategies may help a company or marketer in marketing and other strategic level business decisions.
Pricing Methods and Strategies in Marketing
Lets discuss about various Methods of Pricing.
Cost-Based Pricing
For this pricing, marketer considers cost as a base or benchmark.
- Markup Pricing or Cost Plus Pricing
- Target Rate of Return Pricing
- Absorption Cost Pricing
- Marginal Cost Pricing
Competition Oriented Pricing
This pricing is depend on competitors especially leaders pricing move.
- Premium
- Discount Pricing
- Going Rate Pricing
Demand-Based Pricing
Demand based pricing generally focus on high price targeting low volume or low price targeting high volume.
- Skimming Pricing
- Penetration Pricing
Affordability Based Pricing
Main focus of this type of pricing is to offer products at low price.
Differentiated Pricing
Psychological Pricing
Value Pricing
This type of pricing considers three important factors: Cost, price and benefits
- Value>Price>costs
- Price>Value>CostsPrice>Costs>Value
- Price=Value>Costs
Geographic Pricing
This type of pricing considers various geographical factors such as region, areas, climate conditions, continents etc.
- Free On Board Pricing
- Uniform Delivered Pricing
- Averaging Pricing Method
- Zone Pricing
- Basing Point Pricing
Product Mix Pricing
- Product Line Pricing
- Optional Product Pricing
- Captive Product Pricing
- By Product Pricing
- Product Bundle Pricing
Nine Price Quality Strategy Cells for Pricing Strategies in Marketing
The basis for the classification:
- Price
- Quality
Nine Cells of Price Quality Strategy
Set 1
- High Price High-Quality Premium Strategy
- High Price Medium Quality Over Charging
- High Price Low-Quality Rip Off Strategy
Set 2
- Medium Price High-Quality High-Value Strategy
- Medium Price Medium Quality Medium Value Strategy
- Medium Price Low-Quality False Economy Strategy
Set 3
- Low Price High-Quality Super Value Strategy
- Low Price Medium Quality Good Value Strategy
- Low Price Low-Quality Economy Strategy
This is all about various price-related methods and strategies used in marketing for better decision making. Hope this information will help MBA, BBA, MMM, PGDM and other management students, marketing professionals and researchers.