PRICING STRATEGY

1. Notion
-A pricing strategy is a tactic that businesses use to increase revenue and maximize
profits by selling goods and services at appropriate prices. In particular, the pricing
strategy used includes models or methods that set the best price for a product/service.
2. The role of the pricing strategy
-Increase conversion rates: Price also has a significant impact on customer buying
behavior, so an appropriate price will help businesses attract and retain customers longer,
thereby helping to optimize conversion rates.
- Enhance competitive advantage:
The high or low price of products/services will affect the psychology of customers.
+ Setting lower prices than competitors can attract customers and help businesses dominate the
market.
+ For high-value products/services, setting high prices will create a luxurious and
unique brand image, attracting a group of customers who want class and are willing to
pay higher prices. This can create a competitive advantage based on the quality and
exceptional value of the product/service.
-Reflect brand values:
+ A higher pricing strategy than competitors can create a luxurious, quality and unique
brand image.
+ Customers often associate high prices with quality, reliability. Setting high prices can
help reflectbrand value,creating a competitive advantage based on that unique trait and
reputation. Or choose an average price segment that reflects the consideration between
value and popularity of the product/service. This can create an honest brand image and
provide good value to customers while maintaining a competitive advantage
- Increase brand value in the hearts of customers:
An appropriate pricing strategy requires creating a logical relationship between
the price and value of the product/service. If customers feel the value they receive far
exceeds the price they pay, this can create satisfaction and increase brand value.
However, if the price is higher than the value received, this can be disappointing
and negatively affect the brand value.
3. Factors:
* Factors affecting the valuation
There are many factors that affect the pricing of products/services of businesses. Some
important factors include:
- Production cost: The cost of production is an important factor in pricing a product or service.
If production costs rise, product prices will have to rise to ensure profitability
- Competitive pricing: If the price of your products is higher than similar products of
competitors, this may cause loss of customers
- Product value: If the product is highly appreciated by customers for its quality, features and
efficiency, the business can set a higher price
- The affordability of customers, often depends on their income, finances and social class
- Marketing objectives, such as increasing market share, optimizing profits, creating value for
customers.
4. Common pricing strategies in Marketing
- Market entry pricing strategy:
A market entry pricing strategy is a business strategy that a business uses to enter and
compete in a new market. The goal of this strategy is to attract customers and build a
 position in new markets by pricing products or services at a lower level than existing
competitors.
- Sentimental pricing strategy:
A sentiment pricing strategy is a product/service pricing strategy based on consumer
sentiment. The purpose of this strategy is to influence customer buying behavior and
increase the revenue of the business.
- Combo pricing strategy:
A combo pricing strategy is a package pricing strategy, including
many products/services that are similar or can be used together at an overall price lower
than the price of each individual product/service. The goal of combo pricing is to create
attractive value for customers,motivating them to buy multiple products at the same
time. This can also create benefits for customers by saving time and effort in finding
and purchasing independent items, while providing a more comprehensive value.
- Competitive pricing strategy:
A competitive pricing strategy is a strategy to price products/services of a business
based on the prices of similar products/services of competitors. Rather than based on
user demand and normal price constituents. A common practice is to price your product/service
below or equal to the price of your competitors. Or price the product/service higher than or equ
al to the prices of competitors in different markets.
- Promotional pricing strategy:
A promotional pricing strategy is a tactic of using promotions such as vouchers, coupons,
discounts, bundled gifts,... to stimulate customers to buy products,
thereby helping businesses sell more goods.
A promotional pricing strategy can help businesses attract new customers, increase sales,
create incentives to buy from existing customers, and build loyalty. However, it should
be noted that this strategy can affect the profitability, brand image of the business, so it is neces
sary to carefully
consider the cost factors and the importance of keeping the product value in the eyes of custom
ers.
- Segmental pricing strategy: A segmental pricing strategy is a different product/service
pricing strategy for different customer segments. This strategy is applied when
businesses have many customer segments with different needs and affordability.
3. Competitive pricing strategy:
A competitive pricing strategy is a strategy to price products/services of a business
based on the prices of similar products/services of competitors. Rather than based on
user demand and normal price constituents. A common practice is to price your product/service
below or equal to the price of your competitors. Or price the product/service higher than or equ
al to the prices of competitors in different markets.
4.Promotional pricing strategy:
A promotional pricing strategy is a tactic of using promotions such as vouchers, coupons,
discounts, bundled gifts,... to stimulate customers to buy products,
thereby helping businesses sell more goods.
A promotional pricing strategy can help businesses attract new customers, increase sales,
create incentives to buy from existing customers, and build loyalty. However, it should
be noted that this strategy can affect the profitability, brand image of the business, so it is neces
sary to carefully