Detail of Pricing strategies

3.  Market-Skimming Pricing
High price high quality.
For Example
iPhone use marketing
Skimming.

4. Low price high quality
For Example
the giant Swedish retailer IKEA used penetration pricing to boost its success
in the Chinese market. When IKEA first opened stores in China in 2002,
people crowded in but not to buy home furnishings. Instead, they came to
take advantage of the freebies— air conditioning, clean toilets, and even
decorating ideas. Chinese consumers are famously frugal. When it came
time to actually buy, they shopped instead at local stores just down the
street that offered knockoffs of IKEA’s designs at a fraction of the price.

5.  The strategy for setting a product’s price often has to be
changed when the product is part of a product mix. In this
case, the firm looks for a set of prices that maximizes its
profits on the total product mix. Pricing is difficult because
the various products have related demand and costs and
face different degrees of competition. We now take a closer
look at the five product mix pricing situations.

6.  Price lining, is a marketing process where products or services within a
specific group are set at different price points. The higher the price, the higher
the perceived quality to the consumer, and it also helps to lead people to the
price range they can afford. For instance, a store that sells jeans at $24, $34,
and $44 which shows the customers which price range the belong to and may
sway them into buying the more expensive pair.

7. Optional Price Policy offer the same
product to customers at different
negotiated prices. An example of
Flexible Price Policy is cars, because
you usually buy cars at negotiated
contracts. For example if you buy a
yellow or red BMW, you have to
pay $500 more.

8. Retailers use several different strategies to come up with their prices.
One of the strategies that they use is captive product pricing. This
specific pricing strategy involves a retailer selling a base product for an
inexpensive price or even giving it away for free. However, additional
products are required to receive full benefit of the item received.

9. By-product is a product which is produced
in addition with the main product from the
raw materials. In every organization which
produces some sort of product there must
also be the by product or the raw product.
For example in the extraction of petrol or in textile industries which produce the
main product also produces the byproduct like crude oil.

10. Bundle Pricing is a form of promotional price adjustment that offers
discounted pricing when customers purchase several products at the same
time.
For example, businesses that sell computer hardware often use bundle
pricing to sell software that may not have sold otherwise.

11. Companies usually adjust their basic prices to account
for various customer differences and changing
situations. Here we examine the seven price
adjustment strategies.

12. Most companies adjust their basic price to reward customers for certain
responses, such as the early payment of bills, volume purchases, and off-season
buyin g. These price adjustments— called discounts and allowances—can take
many forms.

13.  Companies will often adjust their basic prices to
allow for differences in customers, products, and
locations. In segmented pricing, the company sells
a product or service at two or more prices, even
though the difference in prices is not based on
differences in costs. Segmented pricing takes several
forms. Under customer-segment pricing, different
customers pay different prices for the same product
or service. Museums and movie theaters, for
example, may charge a lower admission for students
and senior citizens.

14. Psychological pricing are also know as Odd/Even Pricing Is when a business uses
odd/even pricing technique to make their customers think they are getting a
bargain. Studies show that when the prices are different, like $197 triggers in our
brain as cheaper.
For example, Walmart might have the brand new plasma screen TV and you
think it’s a bargain because it is set at $99, but if it was set at $100 you might not
even think of buying it.

15. Promotional Pricing Is a policy that involves reducing the price of a product or
service to attract customers it’s usually a temporary sale that attracts a lot of
customers. For example, McDonalds might come out with new popcorn
chicken bites and for the first 2 weeks there only$2 per box. After they attract
all the customers and get people to try and like their new chicken, they raise
the price up.

16. 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.

17. There are three types of approaches
 Cost-based pricing
Setting prices based on the costs for producing,
distributing, and selling the product plus a fair rate of
return for effort and risk.
 Value-added pricing
Attaching value-added features and services to
differentiate a company’s offers and charging higher
prices.
 Competition-based pricing
Setting prices based on competitors’ strategies, prices,
costs, and market offerings.

18. Pricing is an important
part of product mix,
through pricing strategies
customer can be attract.
We use different strategies to provide
maximum satisfaction to customer by using
different techniques we can attract customer
by giving discount or using psychological
pricing e.t.c.