Cost-plus pricing strategyĪ cost-plus pricing strategy focuses on the cost of producing individual items. If a company exists in a highly saturated market with many direct competitors, a competitive pricing strategy can help the company appeal to customers who are primarily concerned with finding the lowest price.Įxample competitive pricing strategy: A company that sells cell phone accessories sets intentionally low prices to help its products stand out in that market. A competitive pricing strategy uses other company's prices as a standard. Here is an overview of eight common pricing strategies, with examples of each:Ī company with a competitive pricing strategy chooses its prices by looking at the current market rate or going rate of a certain product. The pricing strategy that is best for a company depends on its individual strategic goals. Related: The Value of Increasing Your Business Vocabulary Types of pricing strategies

When choosing a pricing strategy, companies have to consider a number of important factors, including the quality of their products, the manufacturing costs and the market demand.

A good pricing strategy involves setting prices that suit the value of products while also turning a profit.Ī company's goal when it comes to pricing strategies is usually to set unit prices that appeal to customers and are higher than the product's production cost.

View more jobs on Indeed View More What is a pricing strategy?Ī pricing strategy refers to the method companies use to decide which price to set for its products.

Example penetration pricing