Pricing strategies

by - October 23, 2017




I went  back to reading Marketing principles the other day and crossing the pricing headline, I thought that covering this topic in my blog will be helpful specially for those who are just starting out or for small business owners that wish to know more about how to price their products or services. Note that there are pricing strategies which are different that pricing tactics. Pricing strategies are meant to be consistent with your business mission and values. Those are used as a guide while setting prices. I will talk about pricing tactics in another post but let me introduce the strategies first. There are six common pricing strategies that I explained below.

1. Operations-oriented pricing: the objective using this strategy is seeking to match demand and supply to ensure the optimal use of your productive capacity in a certain period of time. A good example can be a hotel that tries to fill the rooms available. So they raise their prices when demand exceeds capacity in order to increase profits and pricing low in off-periods to increase demand.

2. Revenue-oriented pricing: the objective here is attempting to maximise the surplus of income over expenditures. This is also called cost-based pricing where businesses seek to maximize the profits and cover the costs.
3. Customer-oriented pricing: when using this strategy, you want to put your prices for the sake of customer number maximization. Using this strategy will encourage cross-selling opportunities and recognise different levels in the customer's ability to pay.
4. Value-based pricing: mainly used to maintain a luxury image. When using this strategy, you're using the price element to associate the price with value position in people's mind.
5. Relationship-oriented pricing: the objective using this pricing strategy is to set a price that will help you maintain relationship with an existing or potential customers.
6. Socially-oriented pricing: in this strategy, you're mainly song it to encourage or discourage a certain social attitudes and behaviors.

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2 comments

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  2. tinhinanJuly 18, 2019 at 12:42 AM

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