There are several types of pricing strategies that a business owner should know so he can apply it to his business.
When a business owner decides a specific pricing strategy it happens depending on a lot of things like the current position of the business.
Types of pricing strategies:
The goal in this pricing strategy is to gain market share and this happens by entering the market with a price that is less than the competitors price and then after achieving the goal of gaining a large place in the market share the business increase the prices of the products or services gradually.
This strategy takes place when the competitors are few the business introduce new products with high price this method will let the businesses gain profit and maximize it before the competitors enters the market and then after the entrance of other competitors these businesses can lower the prices.
The premium pricing strategy is entering the market with products or services that is better than the competitors in quality and value so the businesses enters the market with very high prices because it have a competitive advantage and this pricing strategy is great for businesses that is starting and small and have unique products because that appears to the customers that it is high in quality and it’s value is huge.
Marketers use this type of pricing and it depends on persuading the customers by the psychology not the common sense, for example placing a price number 1.99$ instead of 2.00$ and that will make the customer feel that the 1.99$ product cheaper than the 2.00$ one.
These are four of the important pricing strategies that the business owners should know very well before entering the market because it will affect the business a lot so put it in your mind.