Pricing Strategies

PRICING STRATEGIES

CHAPTER 1

INTRODUCTION:

Pricing strategies for products or services encompass three main ways to improve profits. These are that the business owner can cut costs or sell more, or find more profit with a better pricing strategy. In the downturn of 2008-11, and since, when costs are likely already at their lowest and sales are hard to find, adopting a better pricing strategy is a key option to stay viable.

Merely raising prices is not always the answer, especially in a poor economy. Too many businesses have been lost because they priced themselves out of the marketplace. On the other hand, too many business and sales staff leave "money on the table". One strategy does not fit all, so adopting a pricing strategy is a learning curve when studying the needs and behaviors of customers and clients.

IMPORTANCE OF RESEARCH:

How you set your prices can have a host of implications for your business. Not every price you set needs to maximize your margins. Many small businesses use price to compete, change market share or create different revenue scenarios. Understanding how pricing affects your business model, not just your bottom line, will help you better choose price levels.

OBJECTIVE OF RESEARCH:

The objective of this research is to find out why pricing strategies are important to a business and what effect they may have on the consumer as well as the business itself.

PLAN OF RESEARCH:

For this research, the aim is to go through different pricing strategies and go into detail with the pros and cons of them and what situations they’re best used in.

CHAPTER 2

Managers should start setting prices during the development stage as part of strategic pricing to avoid launching products or services that cannot sustain profitable prices in the market. This approach to pricing enables companies to either fit costs to prices or scrap products or services that cannot be generated cost-effectively. Through systematic pricing policies and strategies,...