pricing strategies

Presented By:NaveenReddy K

MD1320

• A pricing strategy takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst others.

Types of Pricing Strategies

• Premium Pricing • Penetration Pricing• Economy Pricing • Skimming Pricing

Premium Pricing

• High Price is used as a defining criterion.• Works where a strong competitive advantage

exists for the company.Example: Cars (Jaguar, BMW, Ferrari)and Gillette Blades.

Penetration Pricing

• Price set to “penetrate the market”• Low price to secure high volumes• This is done when a new product launched• Price will be raised when the promotion

period is over and market share achieved.Example: Micromax canvas , Housing Loans.

Economy Pricing

• No-Frill price.• Margins are wafer thin.• Overheads like Marketing and Advertising costs

are very low.• Targets the mass market and high market share

Example: Friendly wash detergents, Nirma, Local Tea Producers.

Skimming Pricing

• High price, Low volumes• Skim the profit from the market• Suitable for products that have short life cycle

Example: Earliest mobile phones , Digital Technology , VCRs, etc.

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