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Price is the amount that the customer pays for the product, for the satisfaction of needs and demands that the customer has made with the purchase of the product. The strategies for marketing purposes under this includes price strategy, price tactics, discounts, mode of payments either by online mode, credit card payment or cash payment or cash on delivery i.e. preferences to the customer’s need should be there.Pricing is one of the most important components of marketing mix or 4P’s of Marketing. It is up to a business organisation that what prices they set for the products and services that they provide to attract the people and increase the demand of product too. Pricing is the one and only component through which an organization can cover the expenses and can gain profits but at the same time it should be enough affordable by the consumers, so these all strategies should be known before launching a new product. Pricing of a product can be used as a defend for new entrants in the existing market or can be used to increase market share or can be used to enter into a new market. After the product is advertised in the market, it is pricing of the product which reflects the standards of the product in the market. For instance if a new product of already known brand is launched then it becomes little easy to make a place in consumer’s heart but if a new product of a new brand is launched it is all dependent on how much the company of that brand spend on advertising the product and how good they advertise to reach to the maximum consumer’s heart.
The pricing of a product should be that amount that could be affordable by number of people because it will create an opportunity for the company to be in a competitive environment.Thus, this technique requires knowledge of consumer’s behaviour that could be proved beneficial for both – the consumers and the company. Due to advancement of technology and new researches, the competition in the market has increased to a great extent and companies should be aware of their opponent’s existing & future products, name& fame in the market and the quality of their products, new advancements they are making with their products etc. And also due to increase in access of Internet, people are becoming more sensitive to pricing. They want best thing at best prices. Many models for the pricing strategies have been put forth and some of these are:
- SKIMMING: Skimming of price in the market is an approach of selling a product at high price. The product may be a technological product like software or hardware or it can be an expensive cosmetic product like perfumes or scents. Under this approach, the products are sold generally at high price until some other comparable product come in the market. The product then can be set at low price to be in competition. By this approach, the company gets opportunity to gain some profits but this technique possess some setbacks as setting high price can also make the product out of competition.
- ODD PRICING OR JUST BELOW PRICING: This pricing strategy works directly on the psychology of the consumers. Sellers set price of a product just below a round-off figure which further create no gap for the consumer to bargain and make the consumer to pay the actual a month for the product. For instance, a dress is set at a price of $99.9 and the consumer without wasting time will pay $100. It perceives to be low in price to the consumers though the cost is actually higher. This is an ultimate psychology pricing.
- FREEMIUM: This strategy works by offering a free of charge of services of a particular good. For instance, an app can be provided with free of cost usage for one month or a week. This strategy is observed to be successful for technological things like games, apps of any game or product, software etc. Freemium is in actual made of two words- free and premium. This offers free premium use of services and further charges with the price that covers all the expenses of the company.
- HIGH-LOW PRICING: This strategy works on different aspects like a product can be sold at high price in retails to maintain a completion in market and on the other hand the product can be sold at low price through coupons , games, contests and promotions.
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