Pricing & Price Strategy
Pricing & price management strategy using proven
pricing models, pricing practices & pricing theories.
22 Laws of MarketingInnovative Price Management, Pricing Tactics, Pricing Strategies & Price Objectives
In Search of Optimal Pricing Strategy
There
are pricing strategies so complex they takes years of work to implement. Some pricing problems exist with
business knowing they have a problem. Many pricing strategies are wrong,
other pricing strategies erode profits, interfere with sales, and undermine
competitive advantage.
How does Pricing Strategy Effect a Brand?
Understanding
buyer behaviour, of all segments in a market, whether its in a B2B market, or a B2C market, is
a key factor in pricing for success.
Price and pricing strategy is interwoven tightly with all other elements of the marketing mix... change the product and you need to review the price (make sense?)... change the distribution, you'll also need to modify price, change the advertising means reviewing price, so does changing processes, changing the people who support the product, changing the positioning... all demand price strategy re-development.
Advanced pricing strategy is about advanced marketing management: Real-time, for each individual segment! Most importantly, price can be the most scientifically manageable, and most potentially powerful, profit-generating tool in the marketing mix.
Understanding Pricing Metrics can make profits soar!
Appling the 5'C's, the 8 P's, PESTLE, 5-Forces in concert with with accurate behavioural
segmentation to every segment means your pricing strategies will maximise profits while
outperforming competition. Using data-mining techniques, you can discover the right price to sell at,
the right price to discount at, the right price to
wholesale at, offer RRP for, and re-positioning to, to significantly improve profits with damaging sales.
Ask for price optimisation research now for maximum profits...
CLICK HERE
Value Based Pricing
Value-based pricing uses buyers’ perceptions of value, not the seller’s cost, as the key to pricing. The organisation uses non-price variables in the marketing mix to build up perceived value in the buyers’ minds. Price is set to match the perceived value.
How you can improve price strategy
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FMCG? Use advanced data mining & analysis techniques to identify the optimal discount price point for 'case deal' promotion at retail.
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Juggling Multiple segments? Use scientific product classification analysis to determine the optimal pricing strategy according to buyer behavioural constants observed in specific product category types.
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Need market share growth in a Competitive Industry? Use life cycle analysis to select the best pricing policy for satisfying anticipated customer trends and winning market approval and market share growth.
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Need more profits? Use sophisticated product analysis, market analysis, competitor analysis and product portfolio management methods to forecast future sales with accuracy, generating better production and inventory control.
Economic Value Pricing Strategy
For many industrial products, the costs perceived by customers extend well beyond the price charged.
An industrial purchaser perceives the cost of equipment as including installation, maintenance, training and use of consumables, as well as the basic purchase price.
Equipment purchases are evaluated over their economic lives and comparisons between competitors go beyond straight price assessment.
Going-rate pricing strategy
The company bases its price largely on competitors’ prices, with less attention paid to its own costs or demand.
The company might charge the same, more or less than its major competitors.
In oligopolistic industries that sell a commodity such as steel, paper or fertiliser, companies normally charge the same price.
The smaller firms follow the leader: they change their prices when the market leader’s prices change, rather than when their own demand or cost changes.
New Product Pricing Strategies
The price of a product changes along with its life cycle. The introductory stage is the most challenging stage for new products.
Companies may use marketing-skimming pricing when they introduce innovative new products. Such companies set a high price in order to maximise their profit quickly.
Marketing-skimming pricing: Setting a high price for a new product to skim maximum revenue from the segments willing to pay the high price; the company make fewer but more profitable sales.
Marketing-penetration pricing: Alternatively, companies may initially set a low initial price for their innovative new products when they enter the market.
The lower price can help the company attract more customers and may lead a group of customers to switch from the competitors. Marketing-penetration pricing enables the company to achieve the leader position in the market.
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Cost Plus Pricing
"DID YOU KNOW... that 70% of Australian companies STILL use a 'cost-plus' approach?" (2010 IQPC Australia)
Some (short-focused) marketers charge 'what the market will bear', but strategic marketers embrace the high-end of marketing science and consider the following, just to begin their development of pricing strategy and pricing policies.
- Corporate objectives, image & positioning
- Industry life cycle
- Channels of distribution
- Brand positioning & brand equity
- Competitive pricing and positioning
- Market penetration
- Elasticity of demand
- Product classification
- PESTLE analysis
- Market segments
- Sustainable competitive advantage
Price as a yard-stick of quality.
Price can be crucial in making a statement about your quality. Price infers value... or the lack of it. Price doesn't matter to some, but is crucial to others... and so the necessity of knowing your market segments and target prospects becomes evident.
Pricing product strategically
Pricing products properly is the black art of all marketing. Managed cleverly, product pricing can be a powerful variable, without thought, discipline and marketing knowledge, lack of product pricing strategy can erode profits and undermine brands.
The logic of pricing products
Pricing strategy should evolve from your mission, vision and purpose for being as well as an intimate understanding the complex buying behaviour and needs of your prime target audience, AND concise & accurate monitoring of close competitors.
Price and product pricing decisions are critical to both short AND long term success... do you want to stay in business for a long time? Or get out quick? Do you need to make a certain amount of money urgently, or want to build a long term business? Do you want to win new business, word of mouth growth at the expense of a few extra dollars or risk everything for short term gains at the risk of being tagged a rip-off?
Economic Theory & Pricing
It was the School of Economics that developed basic theories around pricing in a monopoly, in an oligopoly, in monopolistic competition and perfect competition environments.... but it is the School of Marketing that guides management into profit optimisation from understanding segments and how these economic theories can be used to organisational advantage.
CLICK HERE for help with Pricing Strategy
Call 02 9904 5355 NOW.
Wise Words on Price:
Price is what you pay.
Value is what you get.
Warren Buffett
Reasons to engage a pricing strategy marketing consultant
- Get pricing right to deliver higher profits.
- Make core pricing decisions with quiet confidence.
- Effective pricing strategies and tactical pricing initiatives to a expand margins and generate earnings growth
- Pricing Market Research Consultants that segment a market and work hand-in-hand with clients to enhance product pricing strategy and price optimization.
Don't want to include a consultant? Have at look at the following:
| How to Set Prices for Maximum Profits: CLICK HERE |
A workbook with Excel models to guide you step-by-step into setting prices that will maximize your profits. |
| Pricing Psychology Strategies: CLICK HERE |
Raise prices - and get MORE ORDERS! Discover The Hidden Pricing Tactics You Can Use To Increase Profits! |
| How To Raise Prices Without Losing Sales: CLICK HERE |
PRICING STRATEGY SUCCESS: The secrets of making customers HAPPY to pay HIGHER prices. |
Price and pricing strategy go to the very heart of your marketing mix: Don't take chances, talk to us today, call 02 99904 5355 now.
Marketing planning includes Pricing strategy - you'll find some worksheets in the marketing planning workbook great help in getting your pricing strategy right.
