📚 Seth MB


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Last updated Jan 11, 2023 Edit

# Pricing considerations

# Methods, strategies, and tactics

Pricing method: The method used to calculate the actual price set

Pricing strategies: Adopted over the medium to long term to achieve marketing objectives. Have a significant impact on the marketing strategy.

Pricing tactics: Adopted in the short run to suit particular situations. Limited impact beyond the product itself.

Competitors significantly influence pricing

Price leaders set the pricing for a market - these tend to be the big businesses. Whilst smaller businesses tend to be price followers, who simply follow prices set by the leaders.

Price takers: Have no option but to charge the ruling market price Price makers: Able to fix their own price Price leaders: Market leaders whose price changes are followed by rivals Price followers: Follow the price-changing lead of the market leader

Mark up

Widely used in retail, the amount that you add to the price on top of your production costs.

Loss Leaders: A product or service sold at a loss to encourage people to enter the ecosystem of a product or service.

# Benefits and drawbacks to using cost to influence price

# Benefits

# Drawbacks

# Price Skimming

# Price Penetration

Hook & Bait pricing: Selling a product for a very low price, but it requires another product to work. For example, a printer requires ink—so a company may sell a printer for a low price but then sell ink at a high price to recoup their money through people having to buy new ink.

Dynamic Pricing

Dynamic pricing is a pricing strategy in which businesses set flexible prices for products or services based on current market demands.

Amazon utilizes dynamic pricing, changing their prices on average every 10 minutes.