Pricing Strategies for business

One of the fundamental concepts for any business is the selling of its products or services – this will in most cases involve the customer exchanging money in return for the product. The level at which this money is set is termed the price. Prices are not fixed and can be subjected to strategies and influenced by market conditions.

Pricing Strategies

Pricing strategies usually fall into two camps –

Firstly New Product Pricing strategies exist to support the introduction of products into the marketplace – these strategies usually support marketing from a market awareness perspective and also to get a foothold with consumers – examples of these pricing strategies include introductory discounts or where the product offers some unique qualities which can exert a premium – the price may be set to represent this.

Existing product pricing strategies – Pricing strategies for existing products will typically mitigate market conditions – this could include tracking the market rate for a given product (e.g. suppliers of fuel for example follow the market) – price reductions to secure market share.

Once a strategy is established – a business may deploy short term tactics to react to the market – this could be in the form of promotional offers (buy one get one free) to discounts.

Introduction to Business pricing

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