A pricing structure or strategy is a consistent, uniform, planned approach to pricing of products and services to achieve business and marketing goals. A thoughtful pricing structure is critical in an overall marketing strategy, because it impacts the perception customers have about your brand, products and services, as well as revenue and profit.
Pricing Strategies
A number of distinct strategies exist to meet the objectives of pricing strategies. Premium pricing involves setting prices as high as possible when your company has a distinct competitive advantage, as in the early years of a new popular technology. Penetration pricing involves setting prices as low as possible to gain a foothold in new markets. Psychological pricing involves setting prices as high as possible while considering psychological price barriers. A $19.99 price, for example, may encourage people who are psychologically averse to a $20.00 price to make a purchase. Product line pricing involves setting different prices for similar products or services. Promotional pricing involves cutting prices temporarily to boost sales or marketing effectiveness.