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A retail pricing strategy where retail price is set at double the wholesale price. For example, if a cost of a product for a retailer is £100, then the sale price would be £200. In a competitive industry, it is often not recommended to use keystone pricing as a pricing strategy due to its relatively high profit margin and the fact that other ...
Where pricing is strategic, marketers develop an overall pricing strategy which is consistent with the organization's mission and values. This pricing strategy typically becomes part of the company's overall long-term strategic plan. The strategy is designed to provide broad guidance for price-setters and ensures that the pricing strategy is ...
This pricing strategy yields a result similar to second-degree price discrimination. The two-part tariff increases welfare because the monopolistic markup is eliminated. However, an upstream monopolist may set higher secondary prices, which may reduce welfare. An example of two-part tariff pricing is in the market for razors. [36]
Value-based price, also called value-optimized pricing or charging what the market will bear, is a market-driven pricing strategy which sets the price of a good or service according to its perceived or estimated value. [1]
Dynamic pricing, also referred to as surge pricing, demand pricing, or time-based pricing, and variable pricing, is a revenue management pricing strategy in which businesses set flexible prices for products or services based on current market demands. It usually entails raising prices during periods of peak demand and lowering prices during ...
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 ]
The economic mechanism involves a free market and the predominance of privately owned enterprises in the economy, but public provision of universal welfare services aimed at enhancing individual autonomy and maximizing equality. Examples of contemporary welfare capitalism include the Nordic model of capitalism predominant in Northern Europe. [14]
Dumping, also known as predatory pricing, is a commercial strategy for which a company sells a product at an aggressively low price in a competitive market at a loss.A company with large market share and the ability to temporarily sacrifice selling a product or service at below average cost can drive competitors out of the market, [1] after which the company would be free to raise prices for a ...