Here I have collected for you the most popular price strategy classifications. pricing strategies can be categorized in three groups competitive price strategies, product based and propulsive price strategies. propulsive strategies influence the sales in two ways increasing or decreasing them for most type of goods by increasing the price we decrease the sales if the demand is elastic one of the topics is about price elasticity, where we shall discuss in details what is price elasticity and how it influences our pricing decisions. competitive pricing strategies are four types aggressive, passive, challenging and lagging The competitive pricing strategy is used when other businesses sell just the same product. The market generally set the price for the product. vendors will either match it or set prices within a comparable range.
New companies will use the market price as a starting point for their they can opt to chain to charge slightly more on the basis of factors such as superior customer service, or on extended warranty. Retailers must be fully informed of their direct competitors prices and also know how discerning their customers are on price alone. Price adjustments experiment on special occasions are highly recommended. sales volume must be monitored and analyzed to see which adjustment is working Best then it is implemented on a regular brace. For many small businesses in particular, competitive pricing results in a narrowing of profit margins. This makes the business of vulnerable to a sudden rise in costs.
Passive pricing strategy will stick to the market leader price policy on to simply copy his price changes whenever there are such challenging pricing strategy will challenge the dominating price model for our type of goods. It is the right thing to do when you have an experienced marketing specialist or consultant on your side. Applying lagging pricing strategy vendors wait for us certain amount of time after the market leader changes his price. During that period, they analyze the effect of the change on their sales and only then take appropriate actions. problem based pricing strategy is grounded in the relation price quality. On the left column of the table, we have three quality levels.
Low, medium, high. On the top, we see low, medium and high price. In the interactions, we get nine segments, nine pricing strategies. The names are self explanatory, and I will not go through each one of them. But I will rather focus your attention on the high value on good value strategy. On a conceptual level, they're the same.
The companies offer one level higher quality than price. In other words, customers get more value for their money. These price strategies are easy to be adopted by young businesses, especially in the service sector, provided they do their sales presentations in a proper way. These are the most common pricing strategies according to our course. Should you have any questions, feel free to contact me. The next section will deal with costing and pricing methods