What are objectives of pricing explain types of pricing methods
The objectives of pricing are:
1. Profit maximization: Pricing methods are used to set prices that will maximize profit for a company.
2. Increase market share: Pricing strategies can help a company gain a larger share of the market by setting competitive prices.
3. Maintain competitive advantage: Pricing can be used to maintain a competitive advantage over rivals by offering unique pricing options.
4. Achieve specific marketing objectives: Pricing can be used to support specific marketing objectives, such as promoting a new product or increasing sales in a particular market segment.
Types of pricing methods include:
1. Cost-plus pricing: Prices are set by adding a mark-up to the cost of producing a product or service.
2. Value-based pricing: Prices are set based on the perceived value of the product or service to the customer.
3. Competitive pricing: Prices are set based on the prices charged by competitors in the market.
4. Penetration pricing: Prices are initially set low to gain market share, with the intention of increasing prices once a customer base has been established.
5. Skimming pricing: Prices are set high initially to target early adopters or customers willing to pay a premium price.
6. Dynamic pricing: Prices are adjusted based on market demand, competitor pricing, and other factors.
7. Psychological pricing: Prices are set to create a perception of value or to influence customer behavior.
8. Bundle pricing: Prices are set for a group of products or services sold together at a discounted price.