Feb 18, 2022: Product Pricing Strategy
How to Develop a Product Pricing Strategy for Your Business?
Pricing: is how you choose to price & advertise your product in the market.
Price: is the final exchange of value, it is not the advertised price.
Market Price Position: is an act of positioning your price which is within a defined price
range.
Pricing Strategy: is how you go about pricing your product.
Seven Pricing Strategies: You can use some or all of these for your business –
1. Price Skimming: Charging as much as possible when you start, then lowering the
price as the competition enters the market. Like Drug companies.
2. Market Penetration Pricing: Charging as little as possible when you start, then raising
the prices when you are established. Like social networking – Facebook and Netflix.
3. Premium Pricing: Always charging as much as possible to capture high margins but
fewer customers. Like luxury goods – Coach, Louis Vuitton, Tiffany.
4. Economy Pricing: Always charging as little as possible to capture as many customers
as possible. Like big boxes – Costco, Walmart.
5. Bundle Pricing: Combining high and low-margin products. Like fast foods – Combo
meals.
6. Value-based Pricing: Basing price on customer value. Consulting companies – KPMG,
Erst, and Young.
7. Dynamic Pricing: Adjusting the price based on supply and demand. Usually requires
artificial intelligence. Such as Uber charges more during rush hour and rainstorms.
Build your market pricing strategy by planning on what you are going to do, do it, then
check how your pricing went and see your results then adjust it.
To know more about building your business, and become a better Entrepreneur join our
weekly MentorConnect Sessions with our Mentor David Wagstaff every Thursday.