What are the five pricing strategies of marketing?

First, the cost pricing method

Cost pricing method is a commonly used pricing method in many enterprises, which was most commonly used in the past production-oriented era. It takes into account all the costs incurred in the production and sales of a commodity, plus the expected profit, and then produces the sales price. Generally speaking, costs include raw material procurement, R&D, personnel, management, equipment, workshop, warehousing, transportation, consumption, water and electricity, promotion, brand building, promotion, finance (such as loan and payment cycle) and so on.

Second, the profit pricing method

Refers to the pricing method by which an enterprise sets a target profit rate according to the expected total sales volume and total cost. When the total cost changes little, some manufacturers will raise the gross profit margin target year by year, or adjust the price when the price fluctuates to keep the gross profit margin unchanged. These are all from the perspective of "profit".

Third, the value pricing method

There are two views on value pricing methods and corresponding practices. The first one refers to the strategy of providing high-quality products at a relatively low price, which makes consumers feel that they are worth the money. This operation is cost-effective and adopts the strategy of small profits but quick turnover. For example, Watsons has been playing for a long time, and clothing stores often buy two pieces at a 20% discount, buy three pieces at a 30% discount, or buy a main product to give a bunch of small gifts.

Fourth, the life cycle pricing method

Products will go through different stages, just like human life cycle. In different life cycles, related costs, competitors' actions and consumers' sensitivity to prices are constantly changing. Therefore, the strategy of life cycle pricing method should keep pace with the times, and adopt different pricing strategies flexibly in the introduction period, growth period, maturity period and recession period.

Verb (abbreviation of verb) reverse pricing method

Also known as the price inversion method, it refers to the method that enterprises find out the retail price acceptable to the target consumers through price forecasting and trial sales, and then calculate the wholesale price and ex-factory price. This pricing strategy is based on market demand, not product cost. Most wholesalers and retailers in the distribution channel adopt this pricing method. Manufacturers are accustomed to using cost pricing method and cost life cycle pricing method, while manufacturers operating brands are accustomed to using profit pricing method or value pricing method.