In managing a business, a businessman not only needs to maintain product quality but also needs to master how to set product selling prices. Determining product prices is a policy of the company leadership, determining the right selling price will get the desired profit. Setting a price that is too high will also make it difficult to compete in the market and will be raised by consumers, while setting a selling price that is too low will also make business profits too small.
Factors Influencing Pricing Strategy
Before determining the price of the product that you are going to sell, first consider the following factors: Cost, customers, type of product, target market and competitors.
Pricing Strategy Types
There are several strategies that are most commonly used by business people in determining the selling price of products correctly, you as a businessman can try to apply them, including:
1. Below Average Price
Strategy below the average price or better known as Loss leader pricing, by setting a product selling price below the average market price.
2. Competition-Based Pricing
Competitive pricing strategy by setting the selling price of the product to be the same as or slightly below/slightly above the selling price of competitors' products.
3. Dynamic Pricing
Determination of product selling prices based on time or season, so prices fluctuate according to market demand.
4. Basing-Point Pricing
This strategy sets the selling price of the product plus the cost of shipping goods based on the customer's location, very suitable for online businesses.
5. Skimming Pricing
This strategy emphasizes the popularity of new products, by setting a higher selling price, then the price will decrease because the product is becoming less popular or a new model emerges.
Factors Influencing Pricing Strategy
Before determining the price of the product that you are going to sell, first consider the following factors: Cost, customers, type of product, target market and competitors.
Pricing Strategy Types
There are several strategies that are most commonly used by business people in determining the selling price of products correctly, you as a businessman can try to apply them, including:
1. Below Average Price
Strategy below the average price or better known as Loss leader pricing, by setting a product selling price below the average market price.
2. Competition-Based Pricing
Competitive pricing strategy by setting the selling price of the product to be the same as or slightly below/slightly above the selling price of competitors' products.
3. Dynamic Pricing
Determination of product selling prices based on time or season, so prices fluctuate according to market demand.
4. Basing-Point Pricing
This strategy sets the selling price of the product plus the cost of shipping goods based on the customer's location, very suitable for online businesses.
5. Skimming Pricing
This strategy emphasizes the popularity of new products, by setting a higher selling price, then the price will decrease because the product is becoming less popular or a new model emerges.
