Finals: Lesson 15 Pricing Strategy

• PRICING STRATEGY - it sets the initial price of the product and provides a plan for price changes over time
• 3 New Product Pricing Strategies:

  1. Price Skimming
  2. Penetration Pricing
  3. Status Quo Pricing
• Price Skimming - this strategy consists of charging a high introductory price in  tandem with heavy promotion and later slowly dropping the price.
• Price Skimming - it is usually used when the product has a strong, unique advantage that's not easily copied.
• Price Skimming -  it is also the best strategy to use when trying to recover large investments in development and marketing.
• Penetration Pricing -  it is when a company charges a low price for their product initially in order to reach the largest amount of their target market.
• Penetration Pricing -  this pricing philosophy believes that the more people that buy a product, the more positive word-of mouth will occur, which will produce more sales and profits.
• Penetration Pricing -  the lower price will attract consumers to try a new product and also lead to a larger market share.
• Penetration Pricing - this type of pricing strategy is best if the consumers are price-sensitive
• Price Sensitive - it is when consumers are conscious of the price
• Penetration Pricing -  it is used by a prestigious brand, it can cause a loss in brand equity.
• Status Quo Pricing- which means matching competitors' pricing or charging close to the competition.

   
• Status Quo Pricing - it is used in preventing the current price wars.
• 3 Pricing Strategies:

  1. Everyday Low Price
  2. High/Low Pricing
  3. New Product Pricing Strategies
• Everyday Low Price - it is the theory behind using this pricing strategy is that it provides value to the consumer by eliminating the need to search for better deals elsewhere.
• Everyday Low Price - this is a way of pricing things where the price is always low, so there’s no need for sales or discounts.
• High/Low Pricing - this is a way of pricing things where the price is usually high, but sometimes there are sales that lower the price.