Here are the five best pricing strategies
- Premium Pricing
To differentiate your product from other customers, you may set your pricing at a higher rate. This is ideal for those businesses who are selling unique products and services.
In a study by Steven M. Shugan, it is noted that people use the product’s price as a measure of the product’s quality
Customers perceive products as being worth the higher price. Along with creating a high-quality product, You should ensure that your marketing efforts are well aligned with the value perceive your products to be.Business owners must work hard to create a value perception to its customers. Have you heard of the story of a diamond? Experts suggest that diamonds are worth way lesser than it’s perceived value and yet it is sold for millions Brands such as Starbucks charges a premium price because their entire brand image is based around luxury. Starbucks’ pricing strategy is set on a simple idea: high value at a moderate cost.
- Penetration Pricing
If you are new in the market, then this one’s for you.
This pricing aims to attract first time buyers by offering goods and services on lower pricing.
This gives a sense of urgency for people to buy your products, especially if it has a deadline set on it.
The idea is that customers can’t buy products that they do not know yet.
For you to be able to change their brand loyalty, you have to entice them to try your product
And one good way to do that is to offer it a lower price
- Price Skimming
If the introductory pricing set rates at a low price during their introductory phase, Price skimming launches at a high price then would eventually go lower gradually to access different class of consumers
The strategy is charging a relatively high price during the launch of a new, innovative product and then lowering the price over time
This fits those businesses who have an interesting product like Apple’s iPhone.
Apple is known to release its innovative products at a very high price and would gradually lower it to meet the demands of people.
- Bundle Pricing
Who doesn’t want discounts and freebies?
In this kind of pricing, companies sell a package or set of goods or services for a lower price than they would charge if the customer bought all of them separately.
Not only is bundling products an effective way of moving dead stocks, but it can also increase the value perception in the eyes of your customers since you’re marketing it as if you’re giving them something for free.
- Economy Pricing
To compete with other sellers, businesses usually set their products at the lowest price possible.
This strategy is widely used in the retail industry.
The lower the price, the higher the demand.
With this kind of pricing, businesses usually get more demand.
However, there is a backlash for this strategy.
People perceive lower prices as products with low quality.
Guru Tip
87% of consumers look into the price of the product before they buy. You have to be strategic in pricing your goods.
If you are selling across multiple channels, you have to have uniformed pricing.
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