Intro to Pricing Strategy Flashcards
- 3 Principles of Pricing Strategy
- Va l u e - b a s e d
- Proactive
- Profit-driven
- Strategic Pricing Pyramid
- Implementing the Pricing Strategies
Strategic Pricing
defined as the amount of money that you charge for your products, but
understanding it requires much more than that simple definition.
Pricing
process or methodology used to determine prices for products and services.
Pricing Strategy
portrays value
winning pricing strategy
convinces customers to buy
winning pricing strategy
gives your customers confidence in your product
winning pricing strategy
doesn’t accurately portray the value of your product
weak pricing strategy
makes customers feel uncertain about buying
weak pricing strategy
targets the wrong customers
weak pricing strategy
Setting new product prices high and subsequently lowering the price as competitors enter the market
Skimming pricing
strategy (also called
pricing skimming or
skim pricing)
Pricing products based on the price of
competitive products, rather than cost or
target profit; usually cheaper than
competitors
Competitive Pricing Strategy
Pricing that varies based on marketing and
customer demand
Dynamic Pricing Strategy
Pricing a product based on how much the
customer believes it’s worth
Value-based pricing strategy
Entering a market at a low price and
increasing prices over time
Penetration Pricing Strategy
Pricing a product low because of low costs of
production, marketing, and advertising, and
relying on high sales volume to generate profit
Economy Pricing Strategy
Pricing a product deliberately high to
encourage favorable perceptions of the brand
based on the price
Premium pricing strategy
Adding a fixed percentage on top of the cost of
producing a product, regardless of consumer
demand or competitors’ pricing
Cost-plus pricing strategy
Offering a product for free alongside paid
versions with more features
Freemium pricing strategy
Pricing each finite service or project on a case-
by-case basis according to the value of the
outcome instead of on the time spent to
complete it
Project-based pricing strategy
uses production cost as its basis for
pricing and, to this base cost, a
profit level must be added in order
to come up with the product price.
Cost-based pricing strategies
The floor and ceiling are the
minimum and maximum prices for a
specific product or service
Price Range
Also known as customer-based pricing.
Value-based pricing strategies
pricing concept which is defined as the setting of a product’s price based on the benefits it provides to consumers.
Value-based pricing strategies
also known as competitive pricing
Competition-based pricing strategies
consists of setting the price of a product based on what the competition is charging.
Competition-based pricing strategy
refers to how much is charged for a product or services
Price
