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Pricing Methods and Strategies in Marketing

This post mainly focuses on Pricing Methods and Strategies in Marketing to decide the Price of Products and Services. These pricing methods and strategies may help a company or marketer in marketing and other strategic level business decisions.

Pricing Methods and Strategies in Marketing

Lets discuss about various Methods of Pricing.

Cost-Based Pricing

For this pricing, marketer considers cost as a base or benchmark.

  • Markup Pricing or Cost Plus Pricing
  • Target Rate of Return Pricing
  • Absorption Cost Pricing
  • Marginal Cost Pricing

Competition Oriented Pricing

This pricing is depend on competitors especially leaders pricing move.

  • Premium
  • Discount Pricing
  • Going Rate Pricing

Demand-Based Pricing

Demand based pricing generally focus on high price targeting low volume or low price targeting high volume.

  • Skimming Pricing
  • Penetration Pricing

Affordability Based Pricing

Main focus of this type of pricing is to offer products at low price.

Differentiated Pricing

Psychological Pricing

Value Pricing

This type of pricing considers three important factors: Cost, price and benefits

  • Value>Price>costs
  • Price>Value>CostsPrice>Costs>Value
  • Price=Value>Costs

Geographic Pricing

This type of pricing considers various geographical factors such as region, areas, climate conditions, continents etc.

  • Free On Board Pricing
  • Uniform Delivered Pricing
  • Averaging Pricing Method
  • Zone Pricing
  • Basing Point Pricing

Product Mix Pricing

  • Product Line Pricing
  • Optional Product Pricing
  • Captive Product Pricing
  • By Product Pricing
  • Product Bundle Pricing

Nine Price Quality Strategy Cells for Pricing Strategies in Marketing

The basis for the classification:

  • Price
  • Quality

Nine Cells of Price Quality Strategy

Set 1

  • High Price High-Quality Premium Strategy
  • High Price Medium Quality Over Charging
  • High Price Low-Quality Rip Off Strategy

Set 2

  • Medium Price High-Quality High-Value Strategy
  • Medium Price Medium Quality Medium Value Strategy
  • Medium Price Low-Quality False Economy Strategy

Set 3

  • Low Price High-Quality Super Value Strategy
  • Low Price Medium Quality Good Value Strategy
  • Low Price Low-Quality Economy Strategy

This is all about various price-related methods and strategies used in marketing for better decision making. Hope this information will help MBA, BBA, MMM, PGDM and other management students, marketing professionals and researchers.