12 PRICING STRATEGIES

Marketing Mix and Pricing Strategies

Types of Pricing Strategy

• Cost-Plus Pricing: Mark-up on unit cost.

• Price Skimming: Setting high initial prices for new products.

• Penetration Pricing: Low prices to attract customers.

• Predatory Pricing: Lowering prices to eliminate competition.

• Competitive Pricing: Aligning prices with competitors.

• Psychological Pricing: Pricing just below a whole number (e.g., £1.99).

Factors Determining Pricing Strategy

• Unique Selling Points (USPs): Differentiation allows higher pricing.

• Price Elasticity of Demand: Inelastic demand allows price increases.

• Level of Competition: Less competition allows higher prices.

• Strength of Brand: Strong brands can command higher prices.

• Stage in Product Life Cycle: Pricing adjustments may vary with lifecycle stage.

• Costs: Must consider product costs alongside pricing.

Changes in Pricing to Reflect Social Trends

• Online Sales: Lower prices due to reduced overheads compared to physical stores.

• Price Comparison Sites: Allows consumers to quickly compare prices.

• Dynamic Pricing: Adapting prices based on demand and competition, common in travel and events.

• Personalized Pricing: Pricing based on consumer data and behavior.

Ways to Build a Brand

• Differentiation/USPs: Unique features that set products apart.

• Advertising and Promotion: Increasing visibility and appeal.

• Social Media: Engaging customers; important in modern branding.

Changes in Branding and Promotion to Reflect Social Trends

• Viral Marketing: Creating campaigns that spread organically.

• Emotional Branding: Connecting with consumers on an emotional level.