A successful of selling could be achieved through a well-implemented of the marketing mix. One of the factors is pricing. Whether your business is selling a product or offering a service, price is an essential thing. Actually, if we are talking about the marketing mix, there are four elements. But, in this article, we only focus on strategies of pricing in marketing. The list below is worth to try, even though for a small business.
The basic concept of pricing strategy is finding the right price for your business. The right price is when competitive to the other product in the market. Then, you can mix that strategy with kind of products, placement, and promotion method. Understanding the market is a must when you want to apply the strategies of pricing in marketing. In other words, you must read how competence your market in buying, what trends are happening, and many more. But now, let’s find out the pricing strategies you have to know:
1. Psychological Strategy
Using this method means you are playing with the customers’ emotional instead of their rationality. For certain customer, this strategy works very effectively. For example, the price is written in $99.9 instead of $100. In fact, there is no huge difference when they are in the cashier. But, the first price seems cheaper than the second one. They don’t analyze the use or quality of the product. The first thing attracted is the price.
2. Penetration Strategy
This strategy is suitable for the beginner. You put the lowest price than the market offers. Like the time you see the trend, the price is increased. The magic of this strategy is your customer feels worth to buy your product and service. As they get the benefit and feel satisfied, the higher price seems rational. So, you should be aware once the new competitor sets a lower price than yours and the previous brands.
3. Product Line Strategy
Have you seen a price like this: if you only cut your hair, the price is $11. But if you cut with cream bath, it would be $15. Then, if you choose the complete package, it would be $18. This strategy reflects how much cost you have spent in production. Thus, the price is the range which the customers think it is fair. As the seller, you get the profit through the range rather than you sell as a single item.
4. Bundling Pricing Strategy
This strategy is quite the same as the previous number. But, the difference is this usually used for sale. The more complimentary your product, the more rational you use this method.
5. Geographical Pricing Strategy
Just like the name, you set a price based on the place. Sometimes the buying ability in each place is different. So, you can set the price based on the store is located. Also, it is related to distribution cost. When you do shipping, the product might be more expensive than where it is sold without the delivery process.
Marketing should concern the way how to gain revenue. The higher is better. Those strategies of pricing in marketing above are able to be followed. Actually, there are several other strategies. But, you need a little research to apply them. Start from the simple one, then see how effective it is.