Pricing strategy
Pricing strategy as the pursuit of identifying the optimum price for goods. Main pricing strategies: Discount, Market Penetration, Premium, Skim Pricing. Skim pricing as a technique that companies use to find the optimum price point for a product.
| Рубрика | Финансы, деньги и налоги |
| Вид | доклад |
| Язык | английский |
| Дата добавления | 20.12.2014 |
| Размер файла | 12,0 K |
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Good afternoon, ladies and gentlemen! I'm very glad to see you at this conference and to participate in it. Today I'm going to speak about one of the most decisive processes of running the business: about pricing and its strategies. In my presentation I will cover two main points: the first is definition of a pricing strategy and the second one - types of pricing strategies and their features.
So, let's get it starts!
First of all let's speak about definition of pricing strategy. Pricing strategy is the pursuit of identifying the optimum price for goods. A business can use a variety of pricing strategies during the process of selling products or services. It depends on what goals a company is going to achieve: to defend an existing market from mew entrants, to increase market share or to enter a new market. So, the pricing strategy tends to be one of the more critical elements of running the business.
As you can see on the slide, there are 4 main pricing strategies nowadays:
Discount Pricing
Companies will lean on discount pricing as part of product promotions which is generally used for increasing traffic and attracting new customers. This discounted pricing draws attention to the product and can be used as a hook to bring in customers who will potentially purchase other items. Seasonal changes are good examples of times when companies utilize this strategy in which they discount the prices of the items that are going out of season.
Skim Pricing
Skim pricing is a technique that companies use to find the optimum price point for a product, usually a unique item with unknown consumer demand. The price skimming strategy consists of the company setting the initial product price high to quickly cover embedded costs such as production or advertising, and then begins to slowly reduce the price to being the product to a wider market. The goal with this strategy is to maximize potential profits layer by layer until the optimum price is reached. Electronic devices are examples of this strategy where we see higher prices at market introduction that slowly decrease over time once the initial product buzz weakens.
Market Penetration Pricing
The market penetration pricing strategy has the main objective of gaining market share early for a company. The introduction of the product to the consumer is provided at low end prices in hopes to gain the attention, loyalty, and market share of the customer base. Typically this pricing strategy can been seen in service offerings such as cable or internet in which the provider offers promotions to gain the customers' business and then increases the price after the promotional period.
Premium Pricing
First class airline tickets represent the premium pricing strategy. A company who offers premium quality or exceptional services will use the ability to charge a premium price in comparison to the competition, which in this case is a coach seat in the back of the plane next to the engines. Companies will utilize market research surveys to understand where consumers see their products or services in relation to alternatives to assist in the price setting.
Other pricing strategies familiar to customers today include: competition pricing which provides customers with the price match guarantee, and psychological pricing, which is the common $1.99 example which makes the customer more comfortable because the product price is below their desired top price point. pricing strategy psychological competition
This is the end of my (concise) presentation. Thank you for your attention! Any questions??
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