Discuss how one can price the new products by utilizing the major pricing strategies.?

Expert Solution

Ans. One can price new products by utilizing three major pricing strategies. These strategies are-

Cost-based pricing
Value-based pricing
Competition based pricing

Cost-based pricing-This pricing strategy considers production costs as the determinant to decide the price of the products. A profit level is also set and added accordingly in this amount. Then the final selling price of the product is revealed.

Value-based pricing- This pricing technique is also known as customer-based pricing. The determinant for setting the price of the product is the value or benefits of the particular product. In other words, the customer’s opinion and their need for this product help to decide the price of the product.

Competition based pricing- This pricing strategy involves an analysis of pricing set for similar products already available in the market. In other words, the pricing trends used by the rivals in the market are taken into consideration while deciding the price of the product. This pricing strategy is hence also called competitive pricing.

keosha answered 1 year ago

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