(Last Updated On: June 3, 2017)
This article is about the pricing strategies used for the new product, what is the importance of select pricing strategy for a business? Pricing Strategies play an important part in achieving the business objective in term of profit. Price for the new product depends on different conditions, for details please read the full article.
It is very important for the business to assign a right price to their product on which they can generate profit and can attract a large number of customers to their product. Price plays a crucial role in earning the profit for the business. When the company introduced a new product in the market. At this time the competition is low or very minimal. At this stage, company can charge high price for their product to earn profit in the early life of the product
There are different strategies available in the markets which are as follows
1. Price Anchoring; Offering low price to the customer with respect to the other products of same nature. And marking your price to show that how much they are saving by this.
2. Price Bundle; Offering the group product for one price, through this business can sell their lots of stock and customer get benefit through the bundle deal.
3. The Magical Number Nine; This is one of the best tactic played by the retailers to show their product cheaper and customer will attract to it. For example setting the price of product as $699 will attract the more customers than $700 for the same product
New Pricing Strategies
1. Price Skimming Strategy; If the product is new than the business can charge extra price because of no competition or very low competition in the market and earn a high profit in the early life of the product after that offer a discount when competitor launched their products.
2. Penetration Pricing Strategy; Pricing the product very low to get the market share after that can charge high price by adding new features in the product according to the customer demands.
A business wants to earn the profit by its products so the price selected for the product should be reason through which it can earn a reasonable amount of profit. Selecting too high price will not attract the customers toward the product so the sale will be very low. On the other hand charging very low price can attract the customer but at the end, the company cannot make the profit is also not good. So a suitable price for the product is very important, so business should take care about this.