What are the pricing strategies in business

Six common pricing strategiesare: discount pricing, psychological pricing, differential pricing, regional pricing, combination pricing, and new product pricing.

American taxonomy: competitive pricing, cost-plus pricing, skimming pricing, restrictive pricing, loss leader pricing, market-oriented pricing, penetration pricing, price discrimination pricing, and others.

1, new product pricing

The pricing of new products with patent protection can be skimming pricing method and penetration pricing method.

Skimming pricing method. New products on the market at the beginning, the price will be set higher, in the short term to obtain a thick profit, as soon as possible to recover the investment. Like skimming from the milk contained in the cream, take the essence, called "skimming pricing" method. This method is suitable for market segments with low elasticity of demand.

Penetration pricing. In the new product on the market, the price is set as low as possible, the purpose is to obtain the highest sales volume and maximum market share. When the new product does not have significant features, fierce competition, demand elasticity is large, it is appropriate to use penetration pricing method.

For enterprises to take skimming pricing or penetration pricing, need to take into account market demand, competition, supply, market potential, price elasticity, product characteristics, corporate development strategy and other factors.

The pricing of imitation products: enterprises imitate the best-selling goods in the domestic and foreign markets and produce new products. Imitation products face the problem of product positioning, as far as the quality and price of new products are concerned, there are nine alternative strategies: high quality and good price; high quality and medium price; high quality and low price; medium quality and high price; medium quality and medium price; medium quality and low price; low quality and high price; low quality and medium price; low quality and low price.

2, psychological pricing

Pricing according to the consumer's psychology of consumption, there are the following kinds:

Tail pricing or integer pricing. The price of many commodities, rather than set 0.98 yuan or 0.99 yuan, not set at 1 yuan, is to adapt to the consumer psychology of purchasing a trade-off, the tail number of pricing so that consumers have a "cheap" illusion, more than set at 1 yuan to respond positively, to promote sales.

On the contrary, some commodities are not priced at 9.8 yuan, and set at 10 yuan, the same consumer illusion, catering to consumers, "cheap goods, good goods are not cheap" psychology.

Prestigious pricing. This pricing method has two purposes: one is to improve the image of the product to the price of its name and reputation; the second is to meet the status of the buyer's desire to adapt to the consumer psychology of the buyer.

Habitual pricing, a certain commodity, due to the many similar products, in the market to form a customary price, individual producers are difficult to change. Price reductions are likely to cause consumers to doubt the quality, and price increases may be resisted by consumers.

3, discount pricing

Most companies usually adjust their basic prices, as appropriate, in order to encourage customers to pay off early, buy in bulk or increase off-season purchases. Such price adjustments are called price discounts and concessions.

Cash discounts. A type of price discount offered to purchasers who pay their bills promptly.

Quantity discount. A discount given by a business to customers who buy large quantities of a product to encourage them to buy more. Buying in large quantities enables a business to reduce costs and expenses in production and distribution.

Functional discounts, also called trade discounts. An additional discount given by a manufacturer to a middleman that allows the middleman to obtain a price below the catalog price.

Seasonal Discount: a concession given by a company to encourage customers to buy off-season so that production and sales can remain relatively stable throughout the year.

Promotional Allowance: A promotional allowance offered by a producer to an intermediary in order to expand product sales.

4, discriminatory pricing (differential)

Enterprises tend to adjust the price of their products according to different customers, different times and places, and implement differential pricing, i.e., set two or more prices for the same product or service, but the difference does not reflect changes in cost. There are mainly the following forms: different prices for different customer groups. Different color varieties, styles set different prices. Different parts of the different prices. Different time to set different prices.

5, differential price strategy

The different target markets, different customer groups, different time to take different prices, that is, for different market segments, with different prices to get more sales, such as group prices, airline specials, or rooms in the weekend discounts specials, food and beverage on Sundays to raise prices.

Owners can adopt product mix to expand demand, which is also an effective pricing strategy, by expanding a large number of demand, lowering costs, and fighting for performance through price concessions. They can also adopt different industry alliances to launch package itineraries, such as including airfare or giving away theme park tickets, to make consumers feel that they are getting good value for their money.

Expanded Information

Enterprises should have the necessary prerequisite foundations when choosing pricing strategies. Enterprises that adopt skimming pricing strategies and slightly improved pricing strategies must have high technological capabilities and advanced technological levels, and the quality of their products should be at a relatively high level in China and be recognized by their target customers.

This type of enterprise mostly belongs to the capital, technology-intensive enterprises, or well-known enterprises, is a well-known brand of products, its services to customers belong to the middle and high-income class, mainly to meet the consumer's high quality of life and the psychological need to chase the brand. The use of competitive price strategy, especially the launch of the price war enterprises, to have a certain scale of production.