Pricing Strategies

Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization. The remaining 3p’s are the variable cost for the organization. It costs to produce and design a product, it costs to distribute a product and costs to promote it.

Types of Pricing Strategies

Penetration pricing: Where the organisation sets a low price to increase sales and market share.Skimming pricing: The organisation sets an initial high price and then slowly lowers the price to make the product available to a wider market.Competition pricing: Setting a price in comparison with competitors.Product Line Pricing: Pricing different products within the same product range at different price points.Bundle Pricing: The organization bundles a group of products at a reduced price.Psychological pricing: The seller here will consider the psychology of price and the positioning of price within the market place.Premium pricing: The price set is high to reflect the exclusiveness of the product.Optional pricing: The organization sells optional extras along with the product to maximize its turnover.

Reference: http://www.learnmarketing.net/Price.htm