PRICING STRATEGIES - BM

• Penetration Pricing involves setting an initial low price to quickly gain market share and increase sales volume.
• Skimming Pricing is when the price of a product or service is set high at first, then gradually lowered as competitors enter the market.
• Market Share Leadership


  achieving a dominant position in the market
• Pricing


  is a critical component of marketing strategies that directly impacts revenue, profitability, and market positioning
• Product Life Cycle


  adjusting prices based on the product's stage in the product life cycle (introduction,growth,maturity,decline)
• Survival


  setting prices to cover costs and ensure business continuity
• Legal and Ethical Considerations


  Ensuring compliance with pricing laws and ethical standards
• Profit Maximization


  setting prices to maximize profit margins
• Customer Value


  pricing to reflect the perceived value customers derive from the product or service
• Brand Positioning


  leveraging brand equity and perception in setting premium pricing
• Revenue Maximization


  focus on maximizing total revenue
• Costs


  including production, distribution, and overhead costs
• Market Demand


  understanding customer willingness to pay and price sensitivity
• Competitor's Pricing


  analyzing competitor pricing strategies and market positioning
• Price Elasticity


  measures the responsiveness of demand for a product to changes in price
• Cost-Plus Pricing


  adding a markup to the cost of production to determine the selling price
• Dynamic Pricing


  adjusting prices in real-time based on market conditions, demand, and customer behavior
• Inelastic Demand


  changes in price have little impact on quantity demanded (ex. essential goods)
• Value-Based Pricing


  pricing based on the perceived value to customers rather than production costs or competitors' price
• Elastic Demand


  small changes in price lead to large changes in quantity demanded (ex. luxury goods)
• Competitive Pricing


  setting prices based on competitors' prices either matching, premium, or discount pricing
• Demand Forecasting


  methods: use quantitative methods to forecast demand based on historical data, market trends, and economic factors
• Match Pricing


  setting prices identical to competitors to avoid price wars and maintain market stability
• Value-Based Pricing


  determine pricing based on the perceived value of the product or service to the customer
• Demand Forecasting


  techniques: include time series analysis, regression models, and market research surveys to predict demand under different pricing scenarios
• Premium Pricing


  setting prices higher than competitors to signify superior quality or exclusively
• Discount Pricing


  offering lower prices than competitors to attracts price-sensitive customers