
Pricing Methods
What is Pricing?
Pricing is a term used by firms when setting the selling price of their products. Usually Pricing Strategies are put in place for the company to select a price which is fair for the product in question.
Price is based on a number of things. For example, a business will evaluate how much it costs to produce the product, the average costs of the firm, and the average market price of the same or a similar product by competitors.
Pricing Strategies
There are many different Pricing Strategies, these vary in terms of where the emphasis is put for selection, estimation, comparative analysis, evaluation of costs, and the market situation. Here are some examples of pricing strategies:
Penetration Pricing: The starting price is set extremely low- lower than is normal- in order to gain market share and persuade customers or clients to choose their product over the competitors' products that they may normally purchase. After the business has achieved this, increasing its market share, it is able to choose a more profitable price. For more on penetration pricing visit this webpage.
Premium Pricing: Where there is a unique brand, the business charges a high price in the knowledge that they have a substantial competitive advantage. By marketing their product as higher in value, customers may perceive the product to be higher in value, whilst also having a higher profit margin.
Economy Pricing: Low prices. Costs are kept low in production in order to keep down the selling price. Other overheads, such as marketing their product and branding, are also low cost. This thus allows the product to be priced lower in comparison to competitors, and still retain a healthy profit margin.
Value Pricing: This strategy is used where external factors force business' to provide value products and services e.g. a recession or increased competition. This strategy makes it seem like you are getting a lot for your money.
Price Skimming: This is where a business chooses a high price for their product, which is often newly launched, and has little or even no competition. Consumers will be willing to pay the higher price in order to have the advanced product. This strategy does not, however, last long due to a gradual increase in competition over time.
Geographical Pricing: Simply, geographical pricing is a strategy whereby the seller will alter the price depending on where the buyer is located. This may be due to shipping costs, different operating costs, or competitors pricing in that particular location perhaps due to what the customer is willing to pay.
Product Line Pricing: When there is a range of products or services, the customer expects to pay for what is fair incrementally over the range. In this way, the pricing of this strategy rarely reflects the cost of making the product. For example, in an ice cream cabinet, some flavors could be a lot more expensive to produce than others, however consumers expect to pay the same price for all of the ice cream, and more only if the quantity increases.
Promotional Pricing: This strategy is well-known and is where prices are reduced, or offered for free as part of a deal. This is adopted in order to attract customers and increase sales volume. This includes sales, buy one get one free, special offers, vouchers, discounts etc. Although bringing in more customers, promotional pricing also reduces profit margins.
Product Bundle Pricing: Another form of promotional pricing. Often used to shift old stock or slow-selling items by selling them together (at a lower price) with better selling items.
Captive Product Pricing: When you buy a product for a cheap price but the essential components that are required to make the item useful are sold at an expensive price.
Optional Product Pricing: Including pricey optional extras to offer with a low cost product or service.
Why is Pricing Key for a Business?
Pricing can make or break a business. It is one of the biggest factors when it comes to offering products and services, and usually determines popularity. It must be well thought out and researched so that you benefit from high returns. If you’d like to read more about pricing, have a look at these links:
On pricing strategies: by Marketing Teacher
About pricing in marketing: by Business Jargons
For advice on pricing: by Inc.
Most popular Methods
- Price volume mix analysis (PVM) excel template to better understand your sales and improve pricing strategy.5,6216add_shopping_cart$50.00
by HEURTEBIZE
Pricing Model with Van Westendorp PSM and Newton Miller and Smith's Extension Template
Pricing Model with Van Westendorp PSM and Newton Miller and Smith's Extension, Price Range, Revenue Max, Marginal prices1,535Discussadd_shopping_cart$10.00by Jair Almeida
Pricing Positioning - Industry Competitor Analysis Template Slide
A PowerPoint Slide for any business to compare the average price, and price range of its offering versus competition.667Discussadd_shopping_cart$7.00by Tim Demoures
Van Westendorp Price Sensitivity Meter Excel Template
A tool designed to determine consumer price preferences.4,3796add_shopping_cart$10.00by Alberto Scappini
Price-Volume-Mix Analysis
Tools and methods to calculate and depict price-volume-mix effects and other variances553Discussadd_shopping_cart$39.00by Andrei Okhlopkov
Product Pricing Model (e-commerce)
A model analysing two scenarios used to find the profit-maximising sale price of a product to be released.5972add_shopping_cart$5.00by Piotr Biniecki ACCA
Pricing Excel Model Template
This pricing model is a great tool for completing a market analysis and product comparison.1,476Discussadd_shopping_cart$19.00by Mahender K. Punhani
Restaurant Menu & Recipe Pricing Model
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Strategic Pricing Management
Strategic Pricing Management is the process of consistently making optimal pricing decisions.50Discussadd_shopping_cart$29.00by Flevy
Price Position Analysis
Methods and tools to analyze product price positioning against the competition315Discussadd_shopping_cart$15.00by Andrei Okhlopkov
Pricing Strategy: B2B Markets
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Van Westendorp’s Pricing Method
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How to Calculate Minimum Hourly Rate For Service Providers + Packages
Calculator in Excel and explanatory video demonstrating how much you should charge for client work.1,178Discussadd_shopping_cart$10.00by George Kao
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priced Methods
Pricing Positioning - Industry Competitor Analysis Template Slide
A PowerPoint Slide for any business to compare the average price, and price range of its offering versus competition.667Discussadd_shopping_cart$7.00by Tim Demoures
Price Volume Mix Analysis (PVM) excel template with Charts - Sales mix and Gross Profit by Product
Price volume mix analysis (PVM) excel template to better understand your sales and improve pricing strategy.5,6206add_shopping_cart$50.00by HEURTEBIZE
How to Calculate Minimum Hourly Rate For Service Providers + Packages
Calculator in Excel and explanatory video demonstrating how much you should charge for client work.1,178Discussadd_shopping_cart$10.00by George Kao
Pricing Model with Van Westendorp PSM and Newton Miller and Smith's Extension Template
Pricing Model with Van Westendorp PSM and Newton Miller and Smith's Extension, Price Range, Revenue Max, Marginal prices1,535Discussadd_shopping_cart$10.00by Jair Almeida
Pricing Excel Model Template
This pricing model is a great tool for completing a market analysis and product comparison.1,476Discussadd_shopping_cart$19.00by Mahender K. Punhani
Van Westendorp Price Sensitivity Meter Excel Template
A tool designed to determine consumer price preferences.4,3796add_shopping_cart$10.00by Alberto Scappini
Strategic Pricing Management
Strategic Pricing Management is the process of consistently making optimal pricing decisions.50Discussadd_shopping_cart$29.00by Flevy
Price-Volume-Mix Analysis
Tools and methods to calculate and depict price-volume-mix effects and other variances552Discussadd_shopping_cart$39.00by Andrei Okhlopkov
Product Pricing Model (e-commerce)
A model analysing two scenarios used to find the profit-maximising sale price of a product to be released.5972add_shopping_cart$5.00by Piotr Biniecki ACCA
Restaurant Menu & Recipe Pricing Model
A Fully Automated Model To Calculate Menu Recipe Cost & Pricing47Discussadd_shopping_cart$47.00by Michael B. Fozouni
Data Monetization Strategy
In the Age of Data today, every company operating is essentially a data company. Learn how to monetize that data.14Discussadd_shopping_cart$29.00by Flevy
IT Services Outsourcing Pricing Template
Build your a Pricing Strategy with this IT Service Pricing Model Template80Discussadd_shopping_cart$120.00by Jack Avon
Price Position Analysis
Methods and tools to analyze product price positioning against the competition315Discussadd_shopping_cart$15.00by Andrei Okhlopkov
Pricing Strategy: B2B Markets
This framework covers a detailed account on effective approaches to B2B Pricing Strategy.53Discussadd_shopping_cart$29.00by Flevy
Van Westendorp’s Pricing Method
Determines optimal and acceptable price points, plots demand curves, estimates revenue maximisation points152Discussadd_shopping_cart$12.00by Andrei Okhlopkov
Competitor Pricing Analysis
Competitor Pricing Comparison Analysis203Discussadd_shopping_cart$16.00by Steve Lindsey
Newly published
Kotler's Quality vs Price Nine-Box Matrix Template
Choose the appropriate pricing strategy for your products with this Kotler's Quality-Price Nine-Box Matrix Template.New!Discussadd_shopping_cart$7.00by Tim Demoures
Price Volume Mix Analysis (PVM) excel template with Charts - Sales mix and Gross Profit by Product
Price volume mix analysis (PVM) excel template to better understand your sales and improve pricing strategy.5,6216add_shopping_cart$50.00by HEURTEBIZE
Van Westendorp’s Pricing Method
Determines optimal and acceptable price points, plots demand curves, estimates revenue maximisation points152Discussadd_shopping_cart$12.00by Andrei Okhlopkov
Building Blocks of Data Monetization
Data Monetization is the effective use of data to achieve positive and measurable impact on business revenue.New!Discussadd_shopping_cart$29.00by Flevy
Data Monetization Strategy
In the Age of Data today, every company operating is essentially a data company. Learn how to monetize that data.14Discussadd_shopping_cart$29.00by Flevy
Price-Volume-Mix Analysis
Tools and methods to calculate and depict price-volume-mix effects and other variances553Discussadd_shopping_cart$39.00by Andrei Okhlopkov
Restaurant Menu & Recipe Pricing Model
A Fully Automated Model To Calculate Menu Recipe Cost & Pricing47Discussadd_shopping_cart$47.00by Michael B. Fozouni
Interest on Credit Sales Calculator
The template is constructed to calculate the credit sales for all industries but mainly used for cars, light and heavy e22Discussadd_shopping_cart$10.00by ECF Consultancy
Product Pricing Model (e-commerce)
A model analysing two scenarios used to find the profit-maximising sale price of a product to be released.5972add_shopping_cart$5.00by Piotr Biniecki ACCA
Pricing Strategy: B2B Markets
This framework covers a detailed account on effective approaches to B2B Pricing Strategy.53Discussadd_shopping_cart$29.00by Flevy
Strategic Pricing Management
Strategic Pricing Management is the process of consistently making optimal pricing decisions.50Discussadd_shopping_cart$29.00by Flevy
Price Position Analysis
Methods and tools to analyze product price positioning against the competition315Discussadd_shopping_cart$15.00by Andrei Okhlopkov
Van Westendorp Price Sensitivity Meter Excel Template
A tool designed to determine consumer price preferences.4,3796add_shopping_cart$10.00by Alberto Scappini
IT Services Outsourcing Pricing Template
Build your a Pricing Strategy with this IT Service Pricing Model Template80Discussadd_shopping_cart$120.00by Jack Avon
Pricing Positioning - Industry Competitor Analysis Template Slide
A PowerPoint Slide for any business to compare the average price, and price range of its offering versus competition.667Discussadd_shopping_cart$7.00by Tim Demoures
Competitor Pricing Analysis
Competitor Pricing Comparison Analysis203Discussadd_shopping_cart$16.00by Steve Lindsey
Full catalog
How to Price Discounts in Multi-year SaaS Contracts
This is a ready-to-use Multi-year Pricing Discount Excel template for your SaaS business accounts.686Discussadd_shopping_cartfreeby Ben Murray
Pricing Positioning - Industry Competitor Analysis Template Slide
A PowerPoint Slide for any business to compare the average price, and price range of its offering versus competition.667Discussadd_shopping_cart$7.00by Tim Demoures
How to Know How Much to Charge for a Product
Tips on choosing the right pricing strategy for both services and products.723Discussadd_shopping_cartfreeby Mike Lingle
Price Volume Mix Analysis (PVM) excel template with Charts - Sales mix and Gross Profit by Product
Price volume mix analysis (PVM) excel template to better understand your sales and improve pricing strategy.5,6216add_shopping_cart$50.00by HEURTEBIZE
Markup vs Margin Excel Calculator
A simple Markup vs Margin Excel Calculator for you to understand the different effects both strategies have on pricing.615Discussadd_shopping_cartfreeby Arno Wakfer
Pricing Analytics PPT: Find the optimal price of your product
Estimating Demand Curves Without Price Elasticity to determine the optimal price that maximizes your profit margin.4,1322add_shopping_cartfreeby Michael Lamont
Wholesale Price Calculator Excel
This Excel tool calculates your profitability before submitting customer quotes. Analyse and set prices with ease.2,2731add_shopping_cartfreeby Someka
Simplified Monthly vs Annual Pricing Effects on Cash Flow
What is better for you in your SaaS Business, monthly or annual payment options?3,895Discussadd_shopping_cartfreeby Nicholas Petroski
Monadic Price Testing Excel Template
A tool designed to analyze peoples' purchase intention at different price points and for alternative products.1,384Discussadd_shopping_cartfreeby Alberto Scappini
How to Calculate Minimum Hourly Rate For Service Providers + Packages
Calculator in Excel and explanatory video demonstrating how much you should charge for client work.1,178Discussadd_shopping_cart$10.00by George Kao
Product Pricing Strategy Insights
Mastering the Art of Pricing: What the Textbooks Don't Teach You1,608Discussadd_shopping_cartfreeby Bing Gordon
Pricing Your Product: Product Costing Excel Template
Excel spreadsheet to calculate how much it costs to produce your product.40,926Discussadd_shopping_cartPricing Worksheet
Guidance on setting a price for your product with downloadable pricing worksheet and explanatory article.4,9582add_shopping_cartfreeby Sequoia Capital
Pricing Model with Van Westendorp PSM and Newton Miller and Smith's Extension Template
Pricing Model with Van Westendorp PSM and Newton Miller and Smith's Extension, Price Range, Revenue Max, Marginal prices1,535Discussadd_shopping_cart$10.00by Jair Almeida
Pricing Excel Model Template
This pricing model is a great tool for completing a market analysis and product comparison.1,476Discussadd_shopping_cart$19.00by Mahender K. Punhani
Van Westendorp Price Sensitivity Meter Excel Template
A tool designed to determine consumer price preferences.4,3796add_shopping_cart$10.00by Alberto Scappini
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