The Best Pricing Strategies – Part 1
Once a Day Marketing™ featured video blog: The Best Pricing Strategies – Part 1
Hello, I’m Jim Glover, That Branding Guy, for Once a Day Marketing™. Today we are going to dive deeper into one of the 7Ps of Marketing: Price. There are many effective pricing strategies you can leverage to better penetrate the market or increase profit.
In this blog, we will be discussing the first four of eight different pricing strategies. Choosing the correct one(s) depends on your goals. Distributing product in the marketplace quickly or establishing a position in the marketplace as a very high-end product that commands a higher price are just two of the factors to take into consideration. Always keep in mind that pricing is driven by supply and demand.
The first pricing strategy is called penetration. Very low pricing is established to push product into the marketplace quickly. Margins will be low, however, this strategy should drive increased volume.
Next is skimming. A higher price is set at product launch to capture dollars from early adopters. You are able to charge this customer a higher price because they are willing to pay a premium to be the first ones to have a new/upgraded product.
In competition pricing you decide if you want to be lower, the same or higher than your competition. Consider gas prices; at an intersection typically all of the gas stations set the same price.
Lastly we’ll look at product line strategy. Here you offer a variety of products each at a different price point. For example, low, medium and higher price tiers.Customers on a budget may buy the entry-level product while those with more discretionary income may favor one of the more expensive products.
In Part II we will review four more pricing strategies.
Once a Day Marketing™ positions brands to become #1 in the minds of target customers. Visit our website at www.onceadaymarketing.com. Contact James Glover at (505) 501-1330 or email glover@onceadaymarketing.com. Listen to Ask Those Branding Guys™ every Monday at 11:00am (MDT) streaming live on SantaFe.com KVSF 101.5 FM.
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Filed in: 7Ps of Marketing • Price • Strategy
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