Setting a price for any product is a very important part of work. Here are 9 pricing strategies from which you can choose the one most suitable for your business.
Market penetration strategy
What it is: at the beginning you set a minimal price for your goods to attract more new customers, and as the time passes, you raise the price.
➕ A good way to interest an audience of competitive shops.
➖ Money loses at the stage of entering the market, losing loyalty of those who was attracted by a low price only.
What it is: at the beginning you set the maximum price for your product, and then gradually reduce the price.
➕ Suitable for big brands with loyal customers who are ready to pay a lot of money for newest products.
➖ High prices scare away potential customers, so you have to invest a lot in marketing and promotion.
What it is: you set a price for your goods basing on the prices of your competitors.
➕ You don't scare away clients because of high prices
➖ You don't get extra revenue; you need to investigate which competitors exactly affect your customer flow.
What it is: you divide your assortment into different pricing categories. Goods with better technical characteristics cost more.
➕ You get income from both cheap and expensive goods as technically your products compete with each other, not with products of your competitors.
➖ You need to have quite a wide assortment of goods.