Friday, July 26, 2019

Identify three important conditions for successfully initiating a Essay

Identify three important conditions for successfully initiating a price increase (Pricing Strategies) - Essay Example However, in general context most of the companies price their products in such a way which allows them to remain affordable to the clients and offers them a certain societal value. Pricing strategies come mainly in the form of new product pricing, product mix pricing and price-adjustment strategies. Among the aforementioned forms of pricing, a number of strategies can be employed by the company to price its products. The pricing strategies are described below. New Product Pricing Strategies. These strategies are mainly divided into two types, namely market skimming pricing and market penetration pricing. Market skimming pricing entails setting high price for a product during its launch and slowly reducing the price with the passage of time. On the other hand, market penetration pricing is about setting a low price for a newly launched product and then gradually increasing it as the products reaches the growth stage in its life cycle. Product Mix Pricing Strategies. Companies have several options to price their product mix. It purely depends on the intentions of the company. Some of the most commonly used pricing strategies in this context are product line pricing, product bundle pricing, captive product pricing, optional product pricing, and by-product pricing. Each of these strategies considers certain aspects in pricing the product. Price-Adjustment Strategies. The price of a product needs to be adjusted at times due to the changing situations and several customer differences. Some of the commonly used strategies in this context are geographical pricing, international pricing, discount and allowance pricing, psychological pricing, segmented pricing, promotional pricing, and dynamic pricing. After companies develop the pricing structures of their products, they often face a condition when they are required to modify the prices due to a specific reason. Nevertheless, price changes are initiated

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