The objectives of pricing should consider:
Price Skimming or Market Skimming: Making the right pricing decision, understanding the best product pricing strategies and using price comparison websites or other tactics for research is important for your business.
Search This Site Custom Search Price skimming is also known as market skimming; it is one of a number of product pricing strategies that needs to be considered as part of your sales planning process, part of your pricing decision plans, and as part of your marketing process.
Price is a part of your marketing mix program which includes the 4 Ps of Marketing - place, product, price and promotion. The strategy of price or market skimming has a negative connotation some might think you are taking advantage of the market but it is actually a viable, and positive pricing strategy that can be used very effectively.
Use this strategy when there are enough buyers in the marketplace and the product is in high demand; the cost of producing small volumes of the product is relatively low and certainly lower than the price set by the skimming strategy; and the high price does not attract hungry competitors into the marketplace.
Price Skimming What it is: Price or market skimming raises the price above the real market price to be able to cover costs quickly and earn a quick profit. The price is gradually lowered over time to the market price as the product becomes more widely distributed, and as more competition enters the market.
Why and When to use it: Before you use this strategy, make sure understand your competition in business and conduct a competitor analysis and an industry analysis to thoroughly understand your market.
Use this strategy in the growth stage of the product life cycle when demand and sales are high. Make sure that you can explain that as the first entrant into the market, you took all the risk - and that had to be worth a higher price, even if just for a short while.
Buyer Behavior and the Market As with all price strategies, it is important to thoroughly understand buyer behavior, to be able to predict competitive response to your pricing strategies, and to have a clear understanding of the relationship between your costs and the price. If you can learn to thoroughly understand your market, and act on that understanding, you will enjoy substantial small business growth.
Ensure that you do the necessary market research and competitive intelligence analysis such as reviewing price comparison websites within your industry or market before making pricing decisions.
Price skimming is only one of many strategies promotional pricing, psychological pricing, market penetration pricing, value pricing, loss leader strategy, and more that you need to consider in setting your price; recognize that your strategy needs to be flexible and fluid - just like the market you operate in.
For more timely and regular monthly information on managing your small business, please subscribe here.Price skimming is also known as market skimming; it is one of a number of product pricing strategies that needs to be considered as part of your sales planning process, part of your pricing decision plans, and as part of your marketing process..
Price is a part of your marketing mix program (which includes the 4 Ps of Marketing - place, product, price and promotion). marketing pricing Penetration Pricing. The price charged for products and services is set artificially low in order to gain market share.
Once this is achieved, the price is increased. Understanding different pricing strategies will help you to decide which strategy - or combination of strategies - is most effective for your business. Talk to your business adviser or accountant for help choosing a pricing strategy for your business.
Encyclopedia of Business, 2nd ed. Pricing Policy and Strategy: Or-Pr. Managers should start setting prices during the development stage as part of strategic pricing to avoid launching products or services that cannot sustain profitable prices in the market.
Marketing > Pricing Strategy. Pricing Strategy. One of the four major elements of the marketing mix is price. Pricing is an important strategic issue because it is related to product positioning.
Marketing and promotion strategies Marketing is the process of getting your business noticed by the people who need or want your products or services. Many small businesses come up with a fabulous business idea but then fail to market it successfully.