This document defines and provides examples of various pricing strategies used in marketing management: Premium pricing sets a higher price than competitors to position a product as higher quality. Penetration pricing aims to gain market share by initially pricing lower than competitors. Psychological pricing sets prices just below a whole number as customers are less likely to round up. Bundling combines two products into one package at a discounted price to move excess inventory.

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MARKETING MANAGMENT

2. Premium pricing
It is a type of pricing in which higher price
is fixed than competitors to achieve premium
position. The purpose of premium pricing is to
cultivate a sense in the market that product is
just bit higher in quality than the rest.
For example, Audi and Mercedes

3. Penetration pricing
It is a commonly used pricing method it
is designed to capture market share by
entering the market with a low price as
compared to the competition. The penetration
pricing strategy is used in order to attract
more customers and to make the customer
switch from current brands existing in the
market. The main target group is price
sensitive customers. Once a market share
is captured, the prices are increased by the
company.

4. Economy pricing
This type of pricing takes a very low
cost approach. Just the bare minimum to
keep prices low and attract a specific
segment of the market that is highly price
sensitive. Examples of companies focusing
on this type of pricing include Walmart, Lidl
and Aldi.

5. Skimming price
Price skimming is a product pricing strategy
by which a firm charges the highest initial price
that customers will pay and then lowers it over
time. As the demand of the first customers is
satisfied and competition enters the market, the firm
lowers the price to attract another, more price-
sensitive segment of the population. The skimming
strategy gets its name from "skimming"
successive layers of cream, or customer
segments, as prices are lowered over time.

6. Psychological pricing
Psychological pricing is the practice of setting
prices slightly lower than a whole number. This
practice is based on the belief that customers do not
round up these prices, and so will treat them as lower
prices than they real. This type of pricing is extremely
common for consumer goods It is a type of pricing
which make impact psychologically on customers.
Customers are more willing to buy the necessary
products at RS. 199 than products costing RS. 200
The difference in price is actually completely irrelevant.
However, it makes a great difference in the mind of
the customers. This strategy can frequently be seen in
the supermarkets and small shops.

7. Neutral strategy
This type of pricing focuses on keeping
the price at the same level for all four
periods of the product lifecycle. However, with
this type of strategy, there is no opportunity to
make higher profits and at the same time, it
doesn’t allow for increasing the market share.
Also, when the product declines in turnover,
keeping the same price effects the margins
thereby causing an early demise. This pricing
is used very rarely.

8. Captive product pricing
It is a type of pricing which focuses
on captive products accompanying
the core products. For example, the ink
for a printer is a captive product where
the core products is the printer. When
employing this strategy companies usually
put a higher price on the captive
products resulting in increased revenue
margins, than on the core product.

9. Optional product pricing
Optional product pricing means the
pricing
of optional or accessory products along
with the main product. When a business
decides of selling their products for a
quite cheaper price than they generally
would and depend on the optional
products’ sales to meet up the difference,
it is called Optional product pricing.

10. Bundling price
when two different products are
combined together such as a razor and the
lotion for shaving, and they are offered as a
deal, then we get to experience the
bundling type of pricing first hand. This
strategy is mainly used to get rid of excess
stocks.

11. Promotional pricing strategy
It is just like Bundling price. But here,
the products are bundled so as to make the
customer use the bundled product for the
first time. This type of pricing focuses on
buying one, and getting a new type of
product for free. Promotional pricing can
also serve as a way to move old stock as
well as to increase brand awareness.

12. Geographical pricing
It involves variations of prices
depending on the location where the product
and service is being sold and is mostly
influenced by the changes in the currencies
as well as inflation. An example
of geographic pricing can also be the sales
of heavy machinery, which are sold after
considering the transportation cost of
different locations.

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