Pricing Strategies

The development of the pricing policy of the enterprise is a complicated and important matter. If a company is a beginner, the products it offers only appear on the market, one must first think about what niche it would like to occupy, and what percentage of the potential audience to seize, and then, respectively, choose a pricing strategy. Having reached a certain level, the company expands, plans to increase the share of the presence, or completely changes the range and the target group, and therefore slightly changes the policy of the value of its products.

In the profile literature there is an excellent classification of the types of pricing and strategies used. And almost every section devoted to this ends with the idea that the management of the enterprise requires a complex action. This means that in their personal pricing strategy, elements from several options must be present in different proportions. After all, leadership in the market can be achieved only with a flexible approach to prices and their customers. And this axiom is applicable to any industry. The main thing is not to hurt and find the very ways to win a client. It is very important not to stay without profit.

How do marketers offer to calculate the price of a product? And what are the main pricing strategies?

The most difficult stage for production is the initial stage, when it only conquers the market. In this case, the price will become the determining factor for many buyers. And we will talk about this particular period.

The company can immediately install a minimum permissible value on its product, and the profit from its sale will also be minimal. Such a strategy of "breakthrough" is only suitable if the firm is ready to offer the market a large volume of its products and saturate demand in a short time.

A low price for a product is sometimes put by entrepreneurs not only to penetrate the market, but also to eliminate competition or to achieve the highest possible sales volume before a similar product is offered by a competitor. The profit here, of course, is not in the profit received from each sold unit, but in the sales volumes themselves . The effectiveness of this pricing strategy for small and medium-sized companies will be maximized if they are able to concentrate production on a small market segment. Here, as they say, came - saw - captured, and then left.

You can sell the goods at a deliberately high price, using a strategy called "skimming." In this case, the product is aimed exclusively at the audience ready to buy new products, and the price tells them about a certain advantage, uniqueness in front of the others. This policy is suitable for such industries as, for example, pharmaceuticals, where large expenditures are made for the production (research, development) of new products. But this pricing strategy has a drawback - it can not be used for a long time. So, travel companies for a new product first keep rather high prices, and when demand starts to fall strongly, they are forced to reduce them, in order to win customers with lower purchasing power.

The guidelines of some enterprises, in the same service sector, for example (restaurants, nightclubs), use a strategy of so-called prestigious prices, equivalent to the desire to position their services (goods) in the VIP category. In this case, a high price, associated with exclusivity, a certain prestige and status, is a signal for wealthy customers, on which the firm counts. When using a different pricing strategy, the target group would most likely simply ignore this product (service).

The above strategies are convenient not only at the stage of entering the market. However, to further promote the goods, they must be supplemented with other elements, for example, a system of discounts, discriminatory or psychological pricing.