Are your products and services priced correctly? There are many different ways to implement an overall pricing strategy.  The company will need to decide which strategy they should utilize for each situation in which pricing in necessary. Ultimately, the pricing strategies used can make or break an overall campaign.

Premium Pricing

This strategy requires the company to use a high price that shows off the uniqueness of the product or service.  The approach has competitive advantages, but it can be tricky to implement.

Penetration Pricing

This strategy is used to put low prices on a product in order to gain a fair share of the market.  Once the market share has been achieved, the price can be heightened.

Economy Pricing

This is a general, low cost on a product or service.  There is usually not much marketing and the manufacturing of the product is also kept low.

Price Skimming

This strategy is when a company charges a high price because there is a large competitive advantage.  The advantage is not one the company will likely hold, however, once customers realize how high the prices are compared to other similar products and services.

Psychological Pricing

The company will use the consumer’s emotional response to the product to set the price.  This is often why items are priced at 0.99 instead of $1.

Product Line Pricing

This pricing strategy takes place when the range of products reflects the benefits of a portion of the line.  One item could cost $5 and two items together $7, giving the customer the feel of a discount when they buy more.

Optional Product Pricing

Companies often try to increase how much a customer buys once they start buying.  The customer may buy one thing, but the optional items can be thrown in as bonuses, increasing the overall sale price.

Captive Product Pricing

If the product has a replacement or complement, companies will sometimes charge a low rate for the original product and a higher rate for the complement item that the customer will likely have to purchase later.

Product Bundle Pricing

Sellers combine several products into a package deal.  The customer will be buying more of the products marketed from the company, but will also get a discount over buying each product on an individual basis.

Promotional Pricing

Pricing in order to promote certain aspects of a product is very common.  This form of pricing is generally temporary and is meant to get customers to try the product and return for more at another time.

Geographical Pricing

Items can even be priced based on location.  In certain parts of the country, the product may be rarer than others.  In those locations, it may cost more than regions where the item is plentiful.

Value Pricing
This pricing strategy uses external factors such as competition that force the company to assess the overall value of the item to the customer.