Importance Of Pricing Strategy

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Pricing: pricing is one of the most important components in marketing strategy as its creating revenue and ultimate profit for the company. Success in pricing strategy comes from understanding the customer desire, needs and how much they are willing to pay, market conditions, competitor actions, trade margins and input costs, amongst others. It is targeted at the defined customers and against competitors. Pricing is what company is looking forward to get so that choosing the price is a sensitive process which actually decides not only the profits but name of the company and brand. Entering new market is very difficult due to two major issues, first is competition and second is price and both of them are decided by pricing strategy. Businesses …show more content…
Discount pricing: many companies do use the discount pricing method to create more traffic and attract people and new customers. This method is mostly used in the seasons and festivals. Companies use discount prices to sell products cheaply in large quantities. With this strategy, it is important to reduce costs and remain competitive. Major retailers able to claim a price reduction from suppliers and to provide an effective strategy at discounted prices. Usually, it is impossible to compete with these traders based solely on strategy at discounted prices. Consumers associate low prices with low quality, especially when the brand is not known. Promote the discount pricing strategy increases the likelihood that your product is a decrease in quality. While you can win customers who make decisions on price, customers can opt for other competing products because of the perceived quality. Low prices could boost sales for a limited period, but not to build customer loyalty. When less expensive alternative comes along, you may lose market share in their hard earned money. Simply competitors can match its prices, or hit. When prices moved lower the absolute price, it is difficult to raise prices again, especially if we consider the product as it was less in quality. An example is many like the brands or in festivals like …show more content…
Psycholiogical pricing: the seller or the company will adjust price according to the psychological thinking within the market place and it really works as most of the sellers sell the products in a way that change your perception to the price like if the top price which they want to sell in is 2000 so they will be selling it at 1999 so that the mind will think that its in the range of 1000 only. The reason why this methods work is because buyers will still say they purchased their product less than 2000 even thought it was a rupees or dollar less. This strategy is one of the most successful methods of

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