Pricing strategies and Policies

Guide and inform the pricing decision. Provide a framework within which consistent decision making can be made. Help to specify the role of pricing and its use in the context of the marketing mix. Can help to respond to competitive price threats in mass markets.

PRICING STRATEGIES
Skimming Penetration

Pricing Strategies
Differential Product Line Geographic

Skimming pricing strategy:

involves the use of a high price relative to competitive offerings Often used by marketers of high-end products Also by firms introducing a distinctive good with little or no competition Allows firms to control demand during the introductory stages of a products life cycle. Can be used as a tool for segmenting a products market on a price basis.

Penetration pricing strategy:

Involves the use of a relatively low entry price as compared with competitive offerings; based on the theory that this initial low price will help secure market acceptance.

Every Day Low Pricing (ELDP)Continuously offering low prices rather than relying on such short term price cuts as cents-off coupons, rebates, and special sales

Differential Pricing Strategy

Heterogeneity in the market motivates a firm to adopt this strategy. Companies charge different prices for the same product/ service in different zones/ areas/ on the basis of customer/ etc.

Product Line Pricing Strategy

These are a set of strategies which a multi-product firm may adopt.

Price Bundling

Premium

Image Pricing

Captive Pricing

 Product-Bundle Pricing- Offering two or more complementary products and selling them for a single price
i.e. Season Tickets, Computer Makers

Premium Pricing- Pricing the product above the level of Competitors. Image Pricing- This strategy is useful when consumers infer quality from the prices of substitutes. Captive Pricing-Special price offered to customers.

Geographic Pricing Strategy

A firm may charge a premium in one market, penetration price in another market and a discounted in third one.