What's it: Value-based pricing is a pricing strategy in which a company considers the product's benefits to determine its price. From a company perspective, benefits are reflected in the value added to the product. Meanwhile, for consumers,
Pricing Strategy
Market-Based Pricing: Types, Factors to Consider, Pros and Cons
What's it: Market-based pricing is a pricing strategy in which a company considers the market situation to set its price. In other words, the company focuses on customers (demand) and competitors. Compared with competitors, three options are
Loss Leader Pricing: Meaning, Pros and Cons
What's it: Loss leader pricing refers to a pricing strategy when a company aggressively discounts the price to stimulate sales. In fact, the company posted a loss for loss leader products when adopting this approach. Profits and overall
Cost-plus Pricing: Formulas, How to Calculate, Pros and Cons
What's it: Cost-plus pricing is a pricing strategy in which the company adds up the profit margin (markup) to the cost of making the product. This is the most basic and simplest method because it uses cost as the basis of calculation. Another term
Marginal Cost Pricing: How to Calculate, Advantages, Disadvantages
What's it: Marginal cost pricing refers to a pricing approach in which a firm charges a product according to its marginal cost. In this case, the company takes into account the variable costs per unit. How to calculate marginal-cost
Penetration Pricing: Purpose, Importance, Pros and Cons
What's it: Penetration pricing is a pricing strategy by which a company charges a low price initially and slowly increases it over time. This strategy's main objective is to penetrate the market, that is, to get as many customers as possible and
Promotional pricing: Meaning, Types, Advantages, and Disadvantages
What's it: Promotional pricing is a pricing tactic to attract interest and increase short-term sales. Companies, especially those in the retail industry, usually adopt it to deplete warehouse stock or increase sales during peak
Premium Pricing: How It Works, Advantages And Disadvantages
What's it: Premium pricing is a pricing strategy in which a company offers high prices for its product quality. The keywords are of high price and quality. The company charges a high price to differentiate its products from the competitors'
Destroyer Pricing: Meaning, How it works, Purposes, Pros, Cons
What's it: Destroyer pricing is a low pricing strategy to drive competitors out of the market. After being expelled, the company can act as a monopolist in the market. Other terms for this strategy are undercutting and predatory pricing. The