Price

• Types of Pricing: competitive pricing, penetration pricing, One Price versus Variable Price Policy, Market Skimming Pricing, Discrimination or Dual Pricing, Premium or Prestige Pricing, Leader Pricing, Psychological Pricing, Price Lining, Resale Price Maintenance, Everyday low pricing, Team pricing
• Competitive pricing: Pricing strategy that aims to be the lowest price in the market. In this, the management of a firm fixes the price at the competitive level in certain situations.
• Penetration pricing: A new product is introduced into the market with an initial low price so as to capture a large share of the market quickly. This policy may also be used when there are many competitors already established in the market.
• One Price versus Variable Price Policy: The one-price policy involves charging all customers the same price irrespective of their demand elasticity whereas variable price policy charges different prices to different buyers depending on their demand elasticities.
• Market skimming pricing: It is a type of pricing whereby a high price is charged initially by the manufacturer to extract maximum profits from those consumers who have no close substitutes available. As time passes, the price gradually falls down.
• Discrimination or dual pricing: When two types of consumers exist in the market, it becomes necessary to charge different prices from these two classes of consumers.
• Premium or prestige pricing: When a company wants to create a premium image of its brand it can adopt premium pricing. Here, the price of the product is set higher than the average price prevailing in the industry.
• Leader pricing: If a firm has a strong position in the market, it can use leader pricing to discourage entry of other firms into the industry. By setting very low prices, the existing firm makes it difficult for new entrants to enter the market.
• Psychological pricing: It is a form of non-linear pricing whereby the last digit of the price is changed to make it more attractive to the consumer. For example, instead of Rs.100/-, we can write it as Rs.99/-. Similarly, instead of writing Rs.250/- we can write it as Rs.249/-.
• Price lining: This method is used extensively by retailers. In this, a retailer usually offers a good, better and best assortment of products at different price levels.
• Resale Price Maintenance: A practice where a seller sets a minimum price for a product.
• Everyday Low Pricing: Here price differs even on the basis of early hours of market and late hour of market
• Team Pricing: companies sell a package or set of goods or services for a lower price than they would charge if the customer buys all of them separately. Also known as Price Bundling
• What is price?


  Price is the money value of a product or a service