Marketing mix- Price

Price

Price is one of the elements of the marketing mix. it can have an immediate impact on sales.

Price strategies

The strategies used to set a price.

High/Premium price

Businesses that use a high price strategy deliberately have their price higher than rivals. This is to signal luxury or quality.

Market/Competitive price

This is long term pricing strategy that relies on setting your price at the same level as competitors and rivals

Low/Value price

This long term pricing strategy is set below the market price in order to attract customers.

Psychological pricing

Psychological pricing is used to make customers perceive the price of a product is lower than it is eg 9.99.

Cost-based(cost plus)

This method of pricing is based on calculating the cost of producing the item and then adding on the percentage profit required by the company.

Penetration pricing

Penetration pricing is used to enter a new market. The price will be set lower than competitors to gain market share.

Promotional pricing

Promotional pricing is a short term pricing strategy. prices are reduced for a period of time through discounts , special offers or the use of vouchers.

Price discrimanation

Price discrimination is a short term stagey used when demand for a product or service may change due to changes in consumers in consumer demand.

Destroyer pricing

Destroyer pricing is used to eliminate competition it involves a business setting a very low price in order to attract customers away from competitors. who will struggle to match the low price and may go bust.

Market skimming pricing

A new product is launched at a high price at this early stage those people who must have it will buy the product despite the price.

Loss leader

Using loss leader is a method of selling certain products at a loss or below market value to encourage customers to come into a business.