Pricing Strategies

Charging a different price for the same good/service in different markets

The degree of price elasticity impacts the level of sales & hence revenue, focuses on % changes

Different firms submit their price (bids) for carrying out work to the purchaser

Price set to penetrate the market, low price to secure high volumes

Calculation of the average cost plus a mark up

Goods/services sold below cost to encourage sales elsewhere

Price set to 'absorb' some of the fixed costs of production

Price set in accordance with customer perceptions about the value of the product or service

Setting the price to 'target' a specified profit level

Following the pricing levels of the competition or price leaders

Skim the profit from the market- high price, low volumes

The cost of producing one extra or one fewer item of production

Prices set to ensure coverage of variable costs and a 'contribution' to the fixed costs

Attempting to set the price to cover both fixed and variable costs

Deliberate price cutting to force rivals out of business

Used to play on consumer perceptions ex: odd/even pricing