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By understanding their customers, competitors and costs…
businesses can set prices to maximise revenue and profitability
Pricing can play a significant role in positioning the brand in the market…
and help a firm to compete effectively
Understanding the factors influencing the choice of pricing strategies can help a business make…
informed decisions about its pricing and increases its chances of success
Number of USPS/ Amount of differentiation
Products with many USPs and high differentiation can command higher price s
Technology
The use of online platforms and development of new markets has created new pricing strategies.
Level of competition
In highly competitive markets businesses may need to set their prices low to reman competitive
In less competitive markets, businesses may be able to set higher prices
Strength of the brand
A strong brand with a loyal customer base can command higher prices
Stage in the product life cycle
In the introduction stage, prices may be set lower to attract customers and build market share
In the growth stage, prices can increase as demand for the product increases
In the maturity stage, prices may need to be lowered again
Costs and the need to make a profit
Prices must cover the cost of production and provide a reasonable profit margin
