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What is Price

Definition: Price is the value that is put to a product or service and is the
result of a complex set of calculations, research and understanding and
risk taking ability. A pricing strategy takes into account segments, ability
to pay, market conditions, competitor actions, trade margins and input
.costs, amongst others

Value (marketing) Value in marketing, also known as customer-

perceived value, is the difference between a
prospective customer's evaluation of the benefits and costs of one
product when compared with others

New Product Pricing Strategies

Price skimming is a pricing strategy in which a marketer sets a relatively

high initial price for a product or service at first, then lowers
the price over time. ... As the demand of the first customers is satisfied,
the firm lowers the price to attract another, more price-sensitive
.segment

Penetration pricing is the pricing technique of setting a relatively

low initial entry price, often lower than the eventual market price, to
attract new customers. ... By selling a product at a high price,
sacrificing high sales to gain a high profit is therefore "skimming"
.the market

Product Mix Strategies

Product mix, also known as product assortment, refers to the total

number ofproduct lines that a company offers to its customers. For
.example, a small company may sell multiple lines of products
:product line pricing in marketing

It is the process that retailers use to separate goods into various

cost categories creating different quality levels in the minds of their
customers. Product line pricing is more effective when there are
ample price gaps between each category so that the consumer is
.well informed of the quality differentials

Optional Product Pricing. Companies will attempt to increase the

amount customers spend once they start to buy. Optional 'extras'
increase the overall priceof the product or service. For example
airlines will charge for optional extras such as guaranteeing a
.window seat or reserving a row of seats next to each other

:captive product pricing

Low price are offered for the core product, but high prices are
placed on captiveproducts. This attracts customers to the
core product with a low price but allows sellers to make a profit off
the captive products, which are necessary to use theproduct

:by product pricing

Setting the price for by-products in order to make the price of the
main productmore competitive. For example, in producing
processed meats, chemicals, or oil there are often by-products,
which if they had to be disposed of would make the
main product uncompetitive

product bundle pricing

In a bundle 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. Common examples include option packages on new
cars, value meals at restaurants and cable TV channel plans

- Price adjustment strategies

a. Discount and allowance: Discount and Allowance Pricing. Most
companies adjust their basic price for rewarding their customers due to
customer quick responses. ..
b. Price segmentation is simply charging different prices to different
people for the same or similar product or service. You see examples
every time you go shopping: student prices at movie theaters,
senior prices for coffee at McDonald's, people who use coupons and
many more
c. Psychological Psychological pricing also price ending, charm pricing
is a pricing marketing strategy based on the theory that
certain priceshave a psychological impact. Retail prices are often
expressed as "odd prices": a little less than a round number, e.g. $19.99
or 2.98. ... Psychological pricing is one cause of price point's
d. Promotional: Price promotions or promotional pricing is the sales
promotion technique which involves reducing the price of a product or
services in short term to attract more customers & increase the sales
volume.
e. Geographical pricing, in marketing, is the practice of modifying a
basic list price based on the geographical location of the buyer. It is
intended to reflect the costs of shipping to different locations
f. Dynamic pricing, also called real-time pricing, is an approach to
setting the cost for a product or service that is highly flexible. The goal
of dynamic pricing is to allow a company that sells goods or services
over the Internet to adjust prices on the fly in response
to market demands.
g. International Transfer Pricing Transfer pricing or intra
company pricing refers to the pricing of goods transferred from
operations or sales units in one country to the company' s unit
elsewhere.