Pricing strategies
- high/A high price which aims to maximise profit.
- market/competitive price
- low/value price
High/premium price
Businesses that use a high price strategy deliberately have their price higher than rivals. This is to signal luxury or quality.
- they may not rely on a large number of sales
- they will usually have a high The amount by which sales is greater than costs. on each sale
- it may be difficult to attract customers who may look for better value from the competition
Market/competitive price
This long term pricing strategy relies on setting your price at the same level as competitors and rivals. The business will then compete on other factors such as convenience, customer services or after sales service.
Low/value price
Value pricing is an example of a long term pricing strategy
This long term pricing strategy is set below the market price in order to attract customers.
Customers will often look for the product that is cheapest as a way of saving money. They will only do this if they see the product as value for money.
Low prices can be associated with poor quality, even if this is not always the case. This might put some customers off buying a product.