While making pricing decisions our consultants study client’s and competitor company’s resources, employ methods which provides opportunity to make forecasts of risks related to consequences of price rise, decrease or generally to price setting.
Overall, there are 4 strategies used to form the business decision:
- Pricing strategy for new product – here 2 alternative strategies can be considered:
- Price skimming strategy (at primary stage of product product life-cycle), when company is setting highest price;
- Penetration strategy – setting low price (at primary stage of product life-cycle )
- Pricing strategy of existing product:
-Maintaining price – this strategy is aimed to strengthen company’s image;
-Lowering price – this strategy is adopted usually due to environment change, when you make adequate step related to the change or when decided to strike your competitor;
- Rising price – by this strategic decision:
- Company maintains profit during inflationary periods;
- Segmentation of existing market is made;
- Demonstrate advantage of its product differentiation.
- Flexible pricing strategy -
- Same price for everyone – regardless of conditions;
- Flexible price – different price for different consumers for the same amount of the product.