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Pricing strategies and tactics vary from company to company, and also differ across countries, cultures, industries and over time, with the maturing of industries and markets and changes in wider economic conditions. [2] Pricing strategies determine the price companies set for their products. The price can be set to maximize profitability for ...
Premium pricing (also called prestige pricing [40]) is the strategy of consistently pricing at, or near, the high end of the possible price range to help attract status-conscious consumers. The high pricing of a premium product is used to enhance and reinforce a product's luxury image.
Popularized by the reverse auction pioneer, Priceline.com, such pricing strategy asks consumers to 'name their own price' for various products and services like air tickets, hotels, rental cars, etc. [4] The first bid a consumer places and the subsequent bid increments express the consumer's willingness or unwillingness to haggle. "The economic ...
Predatory pricing is a commercial pricing strategy which involves the use of large scale undercutting to eliminate competition. This is where an industry dominant firm with sizable market power will deliberately reduce the prices of a product or service to loss-making levels to attract all consumers and create a monopoly. [1]
Pricing confidence is an essential organizational characteristic which allows teams to sell the product confidently and believe in the price-worthy value of the product (Liozu et al., 2011). [19] Therefore, it is important that companies build up pricing confidence in a team, showing the team a better insight, creating more value from the product.
The two-part tariff is another form of price discrimination wherein the seller charges a low (loss-making) initial fee in hopes of freezing consumer choice while charging a higher secondary fee for continuing to use the product. This pricing strategy yields a result similar to second-degree price discrimination.
Repricing: Incorporating price intelligence into a pricing strategy is becoming more important to retailers, as 30% of them intend to engage in competitive monitoring in the next 12 months. [10] With the data retailers find through price intelligence, they can effectively reprice in line with competitors.
Yield management (YM) [4] has become part of mainstream business theory and practice over the last fifteen to twenty years. Whether an emerging discipline or a new management science (it has been called both), yield management is a set of yield maximization strategies and tactics to improve the profitability of certain businesses.