Hello, I’m
Jim Glover, That Branding Guy, for Once
a Day Marketing™. Today we are going to dive deeper into one of the 7Ps
of Marketing: Price. There are many effective pricing strategies you can
leverage to better penetrate the market or increase profit.
In this
blog, we will be discussing the first four of eight different pricing
strategies. Choosing the correct one(s) depends on your goals. Distributing
product in the marketplace quickly or establishing a position in the
marketplace as a very high-end product that commands a higher price are just
two of the factors to take into consideration. Always keep in mind that pricing
is driven by supply and demand.
The first
pricing strategy is called penetration. Very low pricing is established to push
product into the marketplace quickly. Margins will be low, however, this
strategy should drive increased volume.
Next is
skimming. A higher price is set at product launch to capture dollars from early
adopters. You are able to charge this customer a higher price because they are
willing to pay a premium to be the first ones to have a new/upgraded product.
In
competition pricing you decide if you want to be lower, the same or higher than
your competition. Consider gas prices; at an intersection typically all of the gas
stations set the same price.
Lastly we’ll
look at product line strategy. Here you offer a variety of products each at a
different price point. For example, low, medium and higher price tiers. Customers on a budget may buy the entry-level
product while those with more discretionary income may favor one of the more
expensive products.
Once a Day Marketing™ positions brands to become #1 in the minds of target customers. Visit our website at www.onceadaymarketing.com. Contact James Glover at (505) 501-1330 or email glover@onceadaymarketing.com. Listen to Ask Those Branding Guys™ every Monday at 11:00am (MDT) streaming live on SantaFe.com KVSF 101.5 FM.
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