Marketing pricing strategies are made to get the most benefit by applying a fair price to your products for you and your customers. These vary over time, the fluctuation of the market, the different times and the economic situation of the population. Since a final price cannot be maintained forever, prices must be set according to strategies adapted to the moment, product or clientele. Below we explain the bases to be successful.
The Basics of Marketing Pricing Strategies
- The higher the price, the lower the demand. It is the basic tenet of marketing pricing strategies that the more expensive something is, the fewer people are willing or able to pay for something. However, a reduced price is more affordable for more people.
- You have to get the right price or balanced price. To be successful in your sales you will need to find that price that is low enough for the customer to pay, you can get the most out of it and the competition is fair. Beware of reducing the price excessively, as it can also generate distrust.
- Use more than one strategy to avoid getting stuck. There are many variables to take into account in a price: supply, demand, production costs, taxes... and even if you have in mind a price that customers can remember and that can attract their attention, it is not possible.</li >
- Building customer loyalty is always the best option. Getting a customer to buy our products again is like making use of renewable energy. Even better, because through word of mouth, that person will also do priceless marketing.
3 Marketing Pricing Strategies That Work:
To better understand each type of strategy, we will accompany the explanation with an example that makes it clear, since we are all consumers and they have affected us both for good and for bad.
Pricing relative to the competition
One of the bases of marketing is to analyze the competition to overcome it. In the case of prices, the ideal may be the opposite. There are three ways to set prices after knowing the price that the competition puts on the products:
- Offer a lower price. It is attractive to customers and a large number of them can be obtained, not only new ones but also making them loyal to our company and getting them to leave the competition behind.
- Offer a higher price. In this case, emphasis should be placed on the extra benefits and differentiators that exist between the products of different companies. The client must know that he is paying more but it is worth it.</ Li>
- Average price. An average price would be similar or equal to that of the rest of the brands in our market niche. Match leaves the decision to buy from our brand or the competition in the hands of the customer. It is a good option if we believe that in this way the maximum profitability is achieved because offering a lower price would mean losses. The marketing strategy would have to be stronger in other ways.
It is one of the most implemented marketing pricing strategies because market niches have a certain number of buyers to be distributed among all companies.
Prices set by neuromarketing
It is one of the oldest strategies, but it still works and that is why it is still used. There are two ways to apply it:
- High prices so that the potential customer assumes that the quality is good for it. The most famous clothing brands implement it successfully, since the quality among the mid-range and them with respect to product is very low. The only thing that increases is the price for carrying that specific brand and therefore they have high profit margins. It is understood that this brand is good and psychology is very strong, especially when applied at a collective level.
- Prices rounded to 95 or 99 cents. Either of these two variants is viable, although the one that rounds the price to 99 cents is usually used, since 4 cents would be earned compared to the other by applying the same concept. If a product is priced at €19.99, the customer will think that it is much cheaper than if it costs €20.00. The difference of that cent makes the price look like it is around 10 rather than 20 for not seeing that first 2 on the label.
From idnovate we put at your disposal a module for web price management. This will make it easier to round both the price of the products and the shipping costs, do it by category, only with certain currencies or in discounts. The facilities it provides to apply marketing pricing strategies are notorious.
Dynamic pricing strategy
If you are going to use this way of pricing items on a website, ideally you should know from the start that it works this way. Customers will better understand the changes and accept the terms on which they change. With this strategy you can get more profit from something that could have a fixed price.
The best example to understand this dynamism are private transport companies such as an airline. Under certain conditions, the prices change, but the customer is still shown a range so that he can choose the one he considers most acceptable. For example, the price of a plane trip changes if it is a weekday, the weekend or a holiday. Within the same day there is also a time difference.
These changes will be validated by the person accepting any of the prices. He may choose convenience over spending more money or vice versa. Having this choice helps the customer know that they are paying a fair price for a service.
To find more modules that help manage prices or make payments keep visiting our store. We have everything you need to start your business and take off.