EM 5 Pricing Strategies Flashcards
What are the 3 primary pricing strategies?
Cost-based pricing
Competitive pricing
Value pricing
What are the two types of discriminatory pricing
Direct - distribution channels (airports, vending machines), places, people
Indirect - vouchers, coupons, quantity
What are the pros and cons of Freemium model
High retention rates
Great for lead generation and customer base
Can damage value perception
No guarantee of covering fixed costs
When to use freemium model?
Marginal cost is low
Large market potential because small % of users are monetized
High virality coefficient
Increasing value over time
What is the freemium model?
It’s a scaling strategy
When to use subscription model?
You offer content
You offer a repeat service
What is dynamic pricing?
Changes based on usage - e.g fuel, electricity, water
What is skimming?
tart high, progressively lower as popularity declines
What is penetration pricing?
start super low; not a long term strategy
What are Bundles/Kits?
combine different products
