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Pricing Strategy:-Introduction

Pricing strategy refers to the strength of the cost that specified goods or services must be sold for on the market. Pricing of a product depends on numerous factors like production cost, marketplace location, competition, and market circumstances, and goods quality. The purpose of a pricing strategy is to optimize the net income generated profit margin by the sale of specified products keeping in mind the common market forces and circumstances that influence them.

As mentioned above Market pricing is one of the most precious components of the advertising mix that decides the accomplishment of goods. It would be uncertain for a corporation to set the cost of the goods an extremely high amount without having suitable brand value. To decide the cost of a good or service is pretty tough as it relies on diverse aspects, for instance, manufacturing cost, quality of the good, physical location, customer group, competition, and financial situation.

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Classification Of Pricing Strategy

Penetration pricing

The penetration pricing strategy is a win-win for companies and their customers. The initial low price of the product in order to attract new clients makes it easy on all parties involved, while also giving consumers an opportunity at trying something they might not have without risk that comes with experimenting or investing too much upfront cost into one item alone; this lets people get accustomed gradually over time before raising prices once it has achieved success within its niche setting – which will hopefully increase demand among potential buyers due to increased popularity (demand).

Competition Pricing

Companies that sell similar products strategically set their prices to be competitive with the competition. This is often done through an organization’s pricing strategy of “competition based-pricing.” With this method, organizations will take into account other brands in order to maintain quality and value for customers while still remaining on par with industry standards for price points – which means you’ll find yourself paying less than what some competitors charge!

Cost-based pricing

This type of pricing strategy is used by those organizations that take the total cost as their basis for determining how much a product should be worth. It includes everything from production and promotion costs, right down to transportation expenses–all in order to establish what it’ll actually sell at once you’re finished making your goods or services available online (plus whatever margin there may/should be). A company can use this method if they don’t want any complex schemes concerning price tags on items, but I would say it’s best suited towards small businesses who need something simple yet effective!

Product line pricing

The product line pricing strategy is an effective way to maximize profits for manufacturers who produce more than one good or service. The company adopts this model in order to make their sales and revenue as high by selling complementary goods at similar prices with different features, which will attract customers looking to buy multiple items from the same brand instead of purchasing them separately when they can get them all together under one roof.

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