PRICING STRATEGIES
1. Cost- Based
Cost-Plus pricing / full-cost pricing / absorption pricing: working out the average cost per unit produced and then adding a percentage markup.
Contribution Pricing: considers the variable costs of production.
2. Competition-Based
Price leadership: it exists where a dominant organization in a market sets a price for its products and its rivals feel compelled to match that price.
Predatory pricing: below the cost you have to pay to do it (illegal in many countries).
Going-rate pricing: the business price their products at whatever the prevailing market price be (benchmark).
3. Market-Based
Price penetration: low price to break into a market and gain market share.
Price skimming: high price to customers that pay any price.
Price discrimination: ideally, depends on the clients.
Loss leaders: very low prices to tempt customers into a store; promotional.
Psychological pricing: the price also gives the customer information about the characteristics of a produc.
Promotional pricing: clear excess of stock quickly or trying to gain market share.
