Welcome to my pricing strategy-ii.
1. Strategist pricing.
Under the policy of price mention to the general principles which the company is going to follow in the area of pricing their products. In accordance, pricing strategy is a set of methods by which these principles can be put into practice.
Different authors identify different types of pricing strategies. For example, in Lipsitz IV, typical pricing strategies are:
· Strategy premium pricing ( "cream skimming");
· Strategy neutral pricing;
· Strategy breakthrough price (low prices).
Strategy breakthrough price - pricing of less than, according to most customers, this product deserves economic value and obtaining a large mass of profit by increasing sales and market share captured. For example, note that this is the pricing strategy in the Russian market holds firm "Epson", selling their printers.
The first condition for the successful implementation of this strategy is the presence of a large range of buyers willing to purchase immediately switch to the new product seller just offer it a lower price. But not always happen and not understanding the managers leads to failure in the implementation of this strategy. Furthermore, for manufacturers of prestige demand such a strategy is not acceptable. This strategy is also ineffective for cheap consumer goods - even greater relative magnitude lower prices are expressed in a very short amount by which buyers cannot pay attention. The little impact it brings in the case of goods, properties which are difficult or impossible to compare the advance of consumption.
Price breakout strategy has the best chance of success in relation to those goods at a price which costs are a small part, but share gains - much more. This means that even a small increase in the number of goods sold will result in a significant increase in the total mass of profit. On the other hand, since the proportion win big, then small price reduction will lead to a significant drop him. It is easy to guess that the general implementation of the strategy of price break can be successful only if the competitors for some reason cannot answer a similar reduction in prices.
Under the policy of price mention to the general principles which the company is going to follow in the area of pricing their products. In accordance, pricing strategy is a set of methods by which these principles can be put into practice.
Different authors identify different types of pricing strategies. For example, in Lipsitz IV, typical pricing strategies are:
· Strategy premium pricing ( "cream skimming");
· Strategy neutral pricing;
· Strategy breakthrough price (low prices).
Strategy breakthrough price - pricing of less than, according to most customers, this product deserves economic value and obtaining a large mass of profit by increasing sales and market share captured. For example, note that this is the pricing strategy in the Russian market holds firm "Epson", selling their printers.
The first condition for the successful implementation of this strategy is the presence of a large range of buyers willing to purchase immediately switch to the new product seller just offer it a lower price. But not always happen and not understanding the managers leads to failure in the implementation of this strategy. Furthermore, for manufacturers of prestige demand such a strategy is not acceptable. This strategy is also ineffective for cheap consumer goods - even greater relative magnitude lower prices are expressed in a very short amount by which buyers cannot pay attention. The little impact it brings in the case of goods, properties which are difficult or impossible to compare the advance of consumption.
Price breakout strategy has the best chance of success in relation to those goods at a price which costs are a small part, but share gains - much more. This means that even a small increase in the number of goods sold will result in a significant increase in the total mass of profit. On the other hand, since the proportion win big, then small price reduction will lead to a significant drop him. It is easy to guess that the general implementation of the strategy of price break can be successful only if the competitors for some reason cannot answer a similar reduction in prices.
The strategy of premium pricing, or "cream skimming" - the pricing level higher than, according to most customers, should cost from this economic value and benefit from high yield sales in a narrow market segment.
The essence of this strategy can be defined as "win high-yield offerings by high volumes." In order to "skim the cream" as a great value gain of each unit of goods sold, the company sets the prices so high that such "cream prices" are not acceptable to most buyers. However, there are significant limitations: weight gain profit by selling at higher price must be greater than the mass loss of profit by reducing the number of sold compared to the level possible at a lower price.
Buyers tend to accept the desire of the company "skim the cream" in the event that they attach particular importance to those differences, in which the company and wants to get the premium price.
Neutral pricing strategy - pricing based on the proportion of "price/value" that exchange letters most other marketed similar goods.
The essence of the pricing strategy is not only to avoid the use of price to increase captured market sector but also to prevent the price in any way influenced downward this sector. Thus, when choosing such a strategic role of prices as a tool for marketing policy of the company is minimized. This may be due to two reasons: managers believe that its objectives can be achieved better by other marketing tools, calculations show that the use of other marketing tools requires less costly than conducting activities related to the manipulation of prices. Neutral pricing is often forced to become a strategy for companies that do not see opportunities to implement the strategy of premium or price breakout. That is a market where buyers are very sensitive to the price level (which does not contribute to the premium pricing), as rivals firmly respond to any attempt to change the proportion of sales generated (making a dangerous strategy for a price break).
In turn, Sleepover VA identifies the following pricing strategies presented in Figure 1:
Basic pricing strategies
Differential pricing strategy
Competitive pricing strategy
Strategy assortment pricing
Strategy discount on the secondary market
Strategy periodic discounts
Strategy random discounts
The strategy of price discrimination
The strategy of market penetration
Strategy on " loop development"
The strategy dread rates
Geographic strategy
Strategy "set"
The strategy of "kit"
Strategy "above par"
The strategy of "picture"
Consider the main types of modern pricing strategies presented in Figure.
Differential pricing strategies based on the heterogeneity of the categories of customers and the possibility of selling a single product across multiple online. Consider your strategy in more detail:
1. Strategy discount on the secondary market based on their fixed and variable costs of the transaction. Generic funds, secondary demographic groups, and some foreign markets make it possible to benefit from the considered strategy. Thus, new drugs often come into competition with identical much cheaper generic drugs. The firm must make a choice: either maintains relatively high prices of patented medicines and losing market share, or to lower the price of incurring losses on this difference, but to preserve or expand the market. The strategy is to differentiate set prices for patented drugs. In that part of selling generic drugs (the first market), the company can get the goods without a brand and due to relatively low prices to increase sales. This pricing method can be used to maintain or expand sales of patented drugs on the market (the secondary market). Lower limit price of the implementation of patented drugs may be cost covering only variable costs as fixed costs are offset by income from the sale of generic drugs.
2. Strategy periodic discounts based on the features customers demand different categories. Widely used in the interim and periodic lowering of prices, for example, tickets for daytime performances, fashion products out of season, travel fares, similar to the principle used at lower prices on older models.
3. Strategy random off (accidentally lowering prices) based on search costs. The basic condition for the application of this strategy is the heterogeneity of the price range. However, for people with high incomes search for the lowest prices does not justify the time spent. For others - on the contrary.
4. The strategy of price discrimination. According to this strategy, the company offers at one and the same time the same product at different prices to different categories of customers.
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Differential pricing strategies based on the heterogeneity of the categories of customers and the possibility of selling a single product across multiple online. Consider your strategy in more detail:
1. Strategy discount on the secondary market based on their fixed and variable costs of the transaction. Generic funds, secondary demographic groups, and some foreign markets make it possible to benefit from the considered strategy. Thus, new drugs often come into competition with identical much cheaper generic drugs. The firm must make a choice: either maintains relatively high prices of patented medicines and losing market share, or to lower the price of incurring losses on this difference, but to preserve or expand the market. The strategy is to differentiate set prices for patented drugs. In that part of selling generic drugs (the first market), the company can get the goods without a brand and due to relatively low prices to increase sales. This pricing method can be used to maintain or expand sales of patented drugs on the market (the secondary market). Lower limit price of the implementation of patented drugs may be cost covering only variable costs as fixed costs are offset by income from the sale of generic drugs.
2. Strategy periodic discounts based on the features customers demand different categories. Widely used in the interim and periodic lowering of prices, for example, tickets for daytime performances, fashion products out of season, travel fares, similar to the principle used at lower prices on older models.
3. Strategy random off (accidentally lowering prices) based on search costs. The basic condition for the application of this strategy is the heterogeneity of the price range. However, for people with high incomes search for the lowest prices does not justify the time spent. For others - on the contrary.
4. The strategy of price discrimination. According to this strategy, the company offers at one and the same time the same product at different prices to different categories of customers.
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