Let's look at traditional types of pricing strategy:
High Price Strategy
This policy is not aimed at the long term. Its essence is to obtain maximum profit in a situation where the target audience needs your product so much that it is ready to buy it even at the highest price.
The strategy of increased prices is implemented under the following conditions:
complete absence of ios database competitors, as well as analogues and substitutes on the market;
competing firms do not have sufficient resources and capabilities to develop the unoccupied segment;
raw materials and components required to produce a new product are significantly limited;
There are certain difficulties in selling a little-known product.
In simple terms, a high price strategy involves skimming off the cream from customers during a period when there is no competition in the market.
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Average (neutral) cost strategy
This pricing principle is widespread, and in a wide variety of industries and niches. Setting the average market price for products is appropriate at all stages of the product life cycle, with the exception of periods of falling demand.
The strategy allows companies to receive stable long-term income as a result of all the funds and efforts invested in production and sales of their products without inciting price wars and enriching individual sellers – market participants.
Classic pricing strategies
Low Price Strategy
Another long-term policy that guarantees maximum effect in conditions of high elasticity of demand cost. Its characteristic feature is that it can be applied at absolutely all stages of the product life cycle.
The price breakout method is most often used in the following cases:
implementation of a strategy to displace competitors from the market (penetration of the site, expansion of the trading segment);
maximizing production volume utilization;
elimination of the threat of company bankruptcy.
Target Price (or Target Profit) Strategy
This pricing policy is typical in most cases for large businesses and collaborations. Its essence lies in maintaining the established sales volume and profit regardless of changes in market prices.
Preferential Cost Strategy
This method is based on providing discounts to the established market price of products in order to increase the current sales volume. This tool shows maximum efficiency in conditions of shortening the product life cycle.
Linked pricing strategy
This policy of setting the price is based on the fact that for a product it consists of its cost price and the price of its further use by the consumer.
Follow the Market Leader Strategy
In this case, when setting the cost, the price of a competing analogue from a market leader is taken into account. It is possible to set both a higher and a lower label, but it is important to justify the increase in cost with quality or technological characteristics and advantages.