Pricing is certainly one of the most important factors of your marketing mix strategy. Correct pricing can make your product a hit or a failure in the market. The factors that have to be kept in mind when marketing your product are the following:
- It has to be of superior quality
- It should have features that your buyers require or desire
- It should be different from what your competitors have to offer
- It should have a good cost structure
- You should also pay attention to a strong promotional campaign
- Keeping these factors in mind, it is important to determine the pricing strategy in a way that helps you to successfully sell your product in the market.
Given below are some alternative pricing strategies:
1. Generic or Economic pricing: In this strategy, the buyer is attracted by the low price. It is typical of generic or economy brands. For this strategy to be fruitful, you should have a low cost structure, minimal features and promotion. Simultaneously, ensure that you reap some solid, stable benefits.
2. Differential pricing: In this method, the idea is to set the price according to different buyer types, (e.g. the price will differ for an online store, a retail store and a departmental store); geographical area, (prices can be higher in California than in Illinois); by the quantity purchased (a person buying large quantities will get a rate different from one buying a small quantity); on the basis of national account segment (the price charged to a national account will vary from that charged to a local account). Do remember, there has to be a valid reason for applying differential pricing.
3. Premium pricing: This strategy is applicable for luxury or high end goods such as expensive jewelry, yachts, planes, estates etc. You can use this strategy if the market recognizes your product as a luxury or premium item.
4. Captive product or companion product pricing: This strategy can be adapted to product line pricing as well. In this case, products are bundled together as companions and priced accordingly. (e.g. a mixer and mixing bowl). They also consider products as captives (e.g. a razor that can only be fitted with a particular blade). These products are often packaged in a single package. (e.g. blades may be packaged with the razor) The prices of these products outside a package usually tend to be higher.
Remember to review your products carefully before choosing a particular strategy so that the pricing is appropriate.
Related posts:
- Pricing Strategies That Improve Profit
Pricing strategies are a sometimes-overlooked part of the marketing mix. They can have a large impact on profit, so should be given the same consideration as promotion and advertising strategies. A higher or lower price can dramatically change both gross margins and sales volume. This indirectly affects other expenses by... - Is Psychological Pricing an Effective Strategy?
Price has a psychological significance attached to it. Buyers have this belief that if a product is highly priced then it is more valuable. Although this belief is more psychological than reality based it makes price tangibles more effective than the product itself. However, it is interesting that as the... - Price Skimming As a Pricing Strategy
Of all the marketing strategies you will use in your business, the pricing strategy is one of the most important. Along with choosing the right product, intelligent marketing, and a sound sales plan the correct price strategy will determine your revenues and market share. Usually the leaders in their industry... - Value Based Pricing
Pricing of a product based on its value judgment is extremely important. Customer preferences, product benefits, company image, convenience and product quality are subjective criteria that will help an organization understand the customer’s perception of the value of its product or service. What customers want is vital. Are they saving... - Offering Discounts as a Part of Your Pricing Strategy
Pricing of goods is difficult. No single determinant magic formula exists that will decide the best price for one’s product. There is no simple strategy but one can take certain measures to make more effective pricing policies. It is difficult to be certain about pricing decisions, one can only rely... - Market Penetration Pricing
A quick-entry price strategy that presumes that sales volume rise when an object is priced low which in turn reduces the overall costs is called market penetration pricing. This is a useful strategy that can be used in price sensitive markets. For example, consider the market for DVD players; this... - Pricing: All You Need to Know
If you are trying to sell something on the Internet, pricing your services/ products would be the single most important decision you will take. Since, the Internet provides thousands of alternatives to the customers, you need to be at par with the competition. The prices that you quite will determine... - Promotional Pricing
Usually promotional pricing are used while launching a new product. It is used to stimulate demand for those products which have a lagging demand. The price target buyers are usually the ones looking for the deal. Some examples of these promotional event pricing are meant for special events. These are... - How To Know If Your Pricing Is Right?
If your prices are not perfect you will not get anywhere even if you have the greatest product/service in the world. Internet firms employ three primary pricing strategies- POPS, CAPS AND VAPS. If they are properly implemented, they can just help the firms gaining an advantage over the rest. (POPS... - Pricing According to the Type of Product
Finding the right price for your product is the key to success, in both the long and the short term. The right price for your product would lie somewhere between the cost and the price a customer is ready to pay for your services. The cost would include the expenses... - Diet, Nutrition And Alternative Medication For Bronchitis
In addition to what your doctor recommends to improve your condition, you can also use a number of alternative medications and treatments to improve your condition and quality of life. One thing to note about alternative medications is that it is not a method of healing your condition. There is... - Competitive Pricing
To figure out whether your items are priced too high or not, do what your customer does. Search the web. According to 2006 yahoo!/OMD, there are about 66% of family who use the Internet to research on a product and 64% use the search engine to buy a product. Take... - An Inch Loss and Cellulite Healing Alternative That Works!!
During my “wellness quest” over the past couple of decades, I stumbled upon the benefits of all natural herbal body wraps. Traditional body wraps that are done at salons can be beneficial, but you have to investigate the ingredients and application methods to be sure they are not geared toward... - Using Sales Strategies That Stand The Test Of Time
Here are a few sales strategies that will stand the test of time and you can apply it to any business you are in: Find Only People Who Want Your Wares This is a very simple mindset that most salesmen fail to understand. If you want to sell and you... - Use SEO Strategies to Increase Web Traffic
Every new technology adopted widely by society brings about a number of new opportunities. The movable type printing press created affordable print information, the telephone and radio created the concept of instantaneous communication over great distances. Today, the Internet has unified both of these concepts into the information explosion that...