Marketing is a very important part in the movement and sale of product or service, and in turn produces a great economic wealth for whomever implements these strategies. These strategies are best used when a company wishes to successfully enhance their overall revenue.
Top 6 Pricing Strategies:
- Price Lining - creating a limited amount of prices for all products of a similar genre. (Ex: Movie tickets usually cost the same no matter where you buy.)
- Bundle Pricing - a promotional price adjustment that offers a discounted price when the customers/consumers purchase several products from the company. (Ex: Getting the "meal" at fast food restaurants allows you to get the burger, fries, and drink for an all together discounted price.)
- Loss-Leader Pricing - to sell products at a lower rate than the regular market and competition value, encouraging more customers to purchase more items from said company. (Ex: Televisions half price, but DVD players listed at normal. Consumer will probably like to buy DVD player with television.)
- Yield-Management Pricing - when a company will charge different prices to maximize revenue over a set amount of time.
- Market Skimming Pricing - when a company will set a high price for a product or service to begin with, but will slowly decrease as time passes. (Ex: Outdated electronics now cheap, once worth three times or more than the current value.)
- Penetration Pricing - setting a low price to begin with in order to attract new customers. The price often rises as customer base grows.
Background
Over hundreds of years, new pricing strategies are being developed in order to help companies make the most money and have the most customers possible. These strategies often change based upon the different needs and wants of people in the particular society, as well as the new technology that is being used. Using these always sharpening strategies, companies will be able to further increase their revenue, as well as create great competition between businesses. Because these strategies are implemented and learned, not owned, there is no owner, but many successful business leaders such as Bill Gates and Warren Buffet show how successful a business can be when certain market strategies are put in action.
Uses
Develop the most suitable, and profitable price for a specific or general product or service.
