This pricing method is not aggressive. It is called neutral for a reason. Its goal is to obtain a sufficient rate of return on invested capital. The average price strategy is used by companies that consider generating income in the long term. Neutral pricing excludes price wars. At the same time, it is impossible to obtain additional event planner email list profit in the fight against competitors with its help.
Bundle pricing
The strategy involves small companies selling bundles of services at a lower cost. This method not only helps to increase sales. Buyers receive the service or product at a large discount or for free, so this strategy helps to increase the perception of value in their eyes.
8 Pricing Strategies in Marketing
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When using this method, it is necessary to take into account the following point: the income received from the sale of more expensive goods must compensate for the losses that arise as a result of selling products at lower prices.
Product Life Cycle Strategy
Any service or product has a certain service life and develops in stages. There are several stages of the product life cycle - introduction, growth, maturity, decline. At the growth stage, the number of sales increases, so enterprises at this stage set higher prices.
For this strategy to be effective, the company using it must have new production technologies and in-demand products.
Strategy based on competition
Very often, small firms reduce the prices of their goods and services to be on par with competitors. Competition-based pricing is a strategy that should be used when the difference in product costs in the industry is small.
Buyers are more likely to pay a company more if its products are of higher quality than those of its competitors or are exclusive.
Factors influencing the choice of pricing strategy
Competition
For effective price management in marketing, it is necessary to take into account the pricing policy of your competitors. It does not matter what pricing strategy your company has adopted. Is the company's product or service not exclusive? Are there many similar offers on the market? In this case, if competitors' prices are lower, the company is at risk of quickly losing customers.
Supply and demand relationship
This is a very important factor that must be taken into account when developing a pricing policy. Higher prices can be set if the product or service is in demand on the market, especially when demand exceeds supply. In the opposite situation, buyers will not want to buy products that are too expensive. The company must constantly maintain a certain price level, but discounts and promotions can be offered as needed.
Trademark
Price in the marketing mix must be considered from the point of view of product or service positioning on the market. It is necessary to take into account that price is one of the components of the brand. The cost of the product must correspond to the created image of the company, otherwise buyers will give preference to competing firms.
Product cost
Naturally, to obtain income, you need to set a price higher than the costs of selling and producing goods. Cost is almost always a significant factor when choosing a pricing strategy. Deviation from this rule is possible when using a pricing method whose goal is to lose a leading position in the market. This strategy is applicable to goods that encourage customers to buy products or services at a cost that guarantees income.
An example is the pricing policy of mobile operators. According to their marketing plan, the price of mobile phones is set at a fairly low level. At the same time, customers can buy the devices at this discounted price only if they simultaneously order a package of communication services from the operator.