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Marketing Pricing is one of the P’s of Marketing Mix. It is an important parameter that decides the product success.Pricing a product too high without any brand support would be lethal to a company. There are few factors that determine the price of a product or service. Fixed Cost, Competition, Target group and their willingness to pay are few of the parameters.
Penetration Pricing: It is the strategy in which an organization sets a low price for a product. Once the product is absorbed well in the market, price can be increased.
Competiton Pricing: Price of the competitors is analyzed properly, and a competitive price is set accordingly. For example, Amazon might check the price of another online book selling store and price the books on their online store.
Cost Based Pricing: All the costs are combined to price the item. It includes the cost of production, cost of transportation and operational cost. In addition, company keeps a profit margin on the top of the total cost.
Product Line pricing strategy: It is like pricing the same product in different price range. For example,a higher version of a car costs more as compared to the car that lacks few features.It ensures that the consumer picks one of the customized product as per his or her needs.
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