PRICING STRATEGY IN BUSINESS

As a Business Owner you have to know your Pricing strategy. I will love to first explain what Pricing means.

Price is the amount of Money that that a goods or commodity worth. It is also a price a seller set to his goods in the Market.

Pricing might be one of the difficult aspects of Business because you don't have the idea of what other party are willing to pay.
You have to set a reasonable price; so as you get Customers, Customers are important to grow and sustain our Business.

You could end up loosing your Business if you price yourself out of the Market place. You have to study the behavior of your
Customers and clients before Choosing a Strategy.

These are some of the pricing strategy you could use:

PRICE SKIMMING: Setting a very high price before other competitors come into the market is what skimming means. This
strategy will work out excellently on new Products because people are in need of the Product and no or few competitors are
involved.

Although this strategy doesn't last long because other competitors will also launch there Products with lower price and it will
definitely affect your own price.

For example: When selfie stick was first launch, everybody are interested in buying it at any price because they love it. After
some times many companies launch there's to, which gives consumer's the option of bargaining.

COST-PLUS PRICING: This pricing method is very easy and simple. In this strategy you will calculate the cost of
Productions and add your Profit to the price to create your selling Price.

This strategy is the most used in the retailing; retailers will be able to know the exact Gross Profit margin for each sale.

PREMIUM PRICING: This kind of pricing is keeping price high artificially. Consumers believes that product that is more
expensive than others tends to last longer.

There believe is that a product that keeps it price high without falling it will be of
high quality. Only a strong brand can practice this kind of pricing.

For examples: you went to the market to buy a shoe and you were given 4 shoes, 3 of this shoes are of the same price while the
fourth one is a bit expensive. Without asking anybody you would believe the fourth one is of more quality.

PENETRATION PRICE: This kind of strategy is setting a low entry price, with the intention for consumers to divert from
other brand to yours. Although you might not make good money at that time but you will figure out how to make your money
when you have enough Customers.

This system is wide use for starting a Business.

For example: Company Ais selling toothpaste at the rate of $200, while company B starts toothpaste production at $150, both
at the same quality. Definitely Consumers will want to divert to company B just to minimize there Expenses.

GEOGRAPHICALPRICING: This king of strategy is when you set your price considering the geographical area you and
your consumers are.

For example: you are in Nigeria and willing to ship a product to America. You have to consider the transportation and tax
before setting up your Price.

Above are some kinds of pricing strategy that you should go through before setting up your price.