Marketing Pricing Strategy
Pricing Strategy
Today’s highly competitive business world forces companies to create different tactics and relatively rely on multiple pricing strategies to conduct business.
As is known, pricing is one of the most important steps for business plan which needs good research, calculations and formulations. There are different pricing strategies to put into effect due to the market and product conditions, such as premium pricing, penetration pricing, economy pricing, price skimming(Voice Marketing, 2012). These four pricing strategies are main pricing policies. They form the bases for the exercise. However there are other important approaches to pricing. These pricing strategies are: Psychological pricing, product line pricing, optional product pricing, captive product pricing, product bundle pricing, promotional pricing, geographical pricing, and value pricing. When the prices were setting, the price list was compared to almost 15 referent which offer similar services as dry cleaners and / or launderers, to determine whether the prices are “fair” or not.
During this research, administrators also had chance to see all the inadequacies or unerring styles and the competitors are already applying and offering while operating their business. It helped Optima’s administrators to improve the service quality and preparing better business plan.
Penetration Pricing Strategy is the practice of setting an initial price much lower than the eventual standard price (Griffin, 2010). Optima did not use Penetration Pricing Strategy; the reason of not using this strategy is that, the company is already in the market since August 2009 and because of the competition in the industry, competitors always try to offer lower prices. In addition to that reason, this strategy does not match with Optima’s concept.
Price skimming: According to Tutors on Net, It is a pricing strategy in which you sell at a higher price until a competitor enters the
Today’s highly competitive business world forces companies to create different tactics and relatively rely on multiple pricing strategies to conduct business.
As is known, pricing is one of the most important steps for business plan which needs good research, calculations and formulations. There are different pricing strategies to put into effect due to the market and product conditions, such as premium pricing, penetration pricing, economy pricing, price skimming(Voice Marketing, 2012). These four pricing strategies are main pricing policies. They form the bases for the exercise. However there are other important approaches to pricing. These pricing strategies are: Psychological pricing, product line pricing, optional product pricing, captive product pricing, product bundle pricing, promotional pricing, geographical pricing, and value pricing. When the prices were setting, the price list was compared to almost 15 referent which offer similar services as dry cleaners and / or launderers, to determine whether the prices are “fair” or not.
During this research, administrators also had chance to see all the inadequacies or unerring styles and the competitors are already applying and offering while operating their business. It helped Optima’s administrators to improve the service quality and preparing better business plan.
Penetration Pricing Strategy is the practice of setting an initial price much lower than the eventual standard price (Griffin, 2010). Optima did not use Penetration Pricing Strategy; the reason of not using this strategy is that, the company is already in the market since August 2009 and because of the competition in the industry, competitors always try to offer lower prices. In addition to that reason, this strategy does not match with Optima’s concept.
Price skimming: According to Tutors on Net, It is a pricing strategy in which you sell at a higher price until a competitor enters the
Bibliography: Bovay, K. (2008). When to Use Value Pricing Or Perceived Value Pricing - 2 Pricing Strategies. (E. Articles, Producer) Retrieved from http://ezinearticles.com/?When-to-Use-Value-Pricing-Or-Perceived-Value-Pricing---2-Pricing-Strategies&id=1341499. Establish. (2011). Logistics Design. (E. Inc., Producer) Retrieved from http://www.establishinc.com/s_logistics_design.asp?gclid=CLSNnYCanK4CFRKR7QodIkdsIw. Frost, S. (2010). http://smallbusiness.chron.com/differential-pricing-strategy-11805.html. Retrieved from smallbusiness.chrone.com. Griffin, D. (2010). Penetration Pricing Strategy. (D. Griffin, Editor, & D. Media, Producer) Retrieved from smallbusiness.chrone.com. Iacobucci, D. (2010). Marketing Management Text Book (Custom Edition ed.). (M. S. Maureen Staudt, Ed.) Mason, Ohio, USA: Cengace Learning. Mc.Kinsey, J. O. (2002). Business Plan Preperation Manual for Entrepreneurs. Retrieved from http://www.cartierwomensinitiative.com/site/uploads/pdf/McKinsey%20BP%20advice.pdf. Tutors On Net. (Retrieved on 02/05/2012). Dynamic Pricing Tutor & Homework Help. Retrieved from http://www.tutorsonnet.com/marketing_homework_help/marketing_fundamentals/dynamic_pricing_assignment_help_tutoring.htm. Voice Marketing. (2012). Product Line Pricing. Retrieved from http://www.more-for-small-business.com/product-line-pricing.html.