Question

Consist of 300 - 400 words

In addition to profit-oriented objectives, what other types of pricing objectives do firms utilize?

Answer 1

Competitor based pricing- The price you set to cater to clients and identify your market compared to your rivals is done for competitor-based pricing. It does not inherently focus on having a lower price than other alternatives available, although this approach would definitely make the goods draw consumers who buy alone on the basis of price. By setting a price that is in the same ballpark as other goods in the same sector, or by selecting a higher price to give the message that your product is exceptional and worth the extra cash, you can still use dynamic pricing efficiently.

Market penetration pricing- A pricing strategy for market entry is targeted at gaining a foothold in a competitive market, typically by providing a low initial price. You will get more people to buy your goods if you start by getting buyers on the basis of price, and then start creating a reputation and clientele that will cause you to ultimately charge more. A plan for market expansion can be dangerous and clients don't want to get accustomed to a low price and then be forced to pay more. However, if the goods do have features other than price that would make consumers want to purchase them, such as special characteristics or unusually high quality, this strategy may be effective.

Skimming pricing Strategy- The opposite logic to that focused on consumer saturation is utilised for the skimming pricing approach. While low prices are used for market expansion to draw interest, skimming uses a credibility that has already been built to threaten early adopters with high prices. If clients are excited about your goods and eager to pay extra to be the first to get them, when you first implement a new concept or a new model, you should charge initial high rates and only decrease the prices after you have already drawn customers who are willing to pay more