Marketing HW

Pricing Strategies

Definition

Example (Book)

Example (New)

Demand Oriented

Weighs factors underlying expected customer tastes and preferences

Skimming

Set the highest initial price that a customer who really desires the product is willing to pay, then slowly drop over time

Penetration

Setting an initially low price to appeal immediately to a mass market

Prestige

Setting a higher price so that a customer perceives a higher quality

Price-lining

Selling a line of similar products at a series of different price points

Odd-Even

Setting a price a few cents below an even number to make a customer feel the price is "around" a certain number

Bundle

Selling two or more products together as a package to add value for a customer

Competition Oriented

Stresses the actions of the competition or the market

Customary

Tradition, distribution channels, or other factors have led consumers to expect a certain price

Above, at, or below market

Knowing what the market average is for a product and choosing to price "above, at, or below" to achieve a certain result

Loss Leader

Selling a product below its customary price to attract attention