Question

Thoroughly explain the various types of pricing strategies and objectives available to global marketers with examples.

Answer 1

Pricing strategies:

1 Market Penetration - This is the strategy followed by the marketers to attract the customers. They set their prices at very low rate at first as compare to others then once the customers are attracted and it gained reputation in the market, they increase the price.

Example - Car nano when introduced in the market was at very low price but later they increase the price once customers attracted.

2. Flexible price

Here the marketers set their rates according to the customer's purchasing power and they charge different rates for same items from the different customers.

Example - Same item charges vary according to the customer class like high for high class and lower for middle class.

3. Fixed price

Here the marketers follow the fixed rate policy and charge the same price from all the customers. This attract the customers and create the Goodwill.

But one drawback is that high end class may avoid such items considering them as lower quality product.

4. Price skimming

Here the marketers charge the high charges when the product is launched untill no competitive product is present in the market.

Example - when new phone launches, price is relatively high in the starting and later decreased.

5. Economy price

They fix their prices at very lower rate.

Example - Big Bazaars, More, etc., keep their price at lower rate.