Question

Explain the various pricing strategies a Fintech platform make? (5-6 strategies)

Answer 1

Price is the value placed on a good or service and is the outcome of a complicated collection of ability-taking measurements, analysis and understanding, and risk. A pricing plan involves categories, willingness to pay, business dynamics, competitor behaviour, trade margins and cost of inputs. It's aimed against the established customers and the competitors.

Premium pricing: it uses high rates as a determining criterion. These pricing strategies work in markets and sectors where the company has a good competitive advantage. Example: in car porches, and in blades, Gillette.

Penetration Pricing: The price is set artificially low in order to rapidly capture market share. This is achieved after the introduction of a new product. It is known that, after the promotion phase is over, prices will increase and market share goals are achieved. Example: Indian cell phone rates; housing credits etc.

Economy Pricing: pay for no-frills. Margins are wafer thin; overheads such as advertising and marketing costs are very modest. Large market targets, with strong market share. Example: Friendly detergents for washing; Nirma; local producers of tea;

Skimming strategy: high prices are paid for a commodity until such time as the rivals cause prices to drop afterwards. The aim is to raise the most money until more rivals are attracted by the product or section, which would reduce profits for those concerned. Example: the earliest prices for mobile phones, VCRs and other electronic products where a few players dominated have attracted Asian players with lower costs.