Choosing the type of pricing strategy - which one should you pick? :- www.deekpay.com

India is a price sensitive country. Therefore, no matter what your product or service is, price is often the element on which most consumers make their final decision. In today's competitive marketplace, companies need to carefully consider this aspect when deciding on a marketing and pricing strategy for their goods or services.

When determining your prices, you should ensure that you meet your pricing objectives. To help you choose the right price for your products and services, we've selected some of the best pricing strategies for you to consider.

Types of Pricing Strategies

Here are some of the top pricing strategies you can use to determine the price to quote your customers:

Value Pricing: The price of a product depends on the value that customers perceive your product or service to be. This model is extremely relevant in today's competitive marketplace, where companies strive to provide additional value to consumers to maintain sales.

Competitive Pricing: In this product pricing strategy, the price of your product is either equal to or lower than your competitors. You can either offer your customers a better price (which is the most common scenario) or offer a similar price to your competitors but with better payment terms.

High-price skimming: Initial prices are set high to capitalise on the high-end customer base. Prices are then gradually lowered to expand the customer base and increase product coverage. Companies need to be cautious when implementing a high-price skimming strategy. If the strategy fails, it may lead to inventory build-up and loss of business.

Geographic Pricing: As the name suggests, geographic pricing is the setting of prices based on where a product or service is offered. Businesses need to be particularly careful in considering local laws, taxes and account management.

Low price penetration: This is the exact opposite of the high price skimming strategy. As competition intensifies, price becomes a key factor in determining the survival of a business. In order to enter the market, new firms often resort to offering their products and services at lower prices to attract customers, which is known as market penetration or price penetration pricing strategy.

Cost Plus Pricing : As simple as it sounds, cost plus pricing is basically adding a specific markup to the cost of a product. Here is an example of a cost-plus pricing strategy - Let's say your product cost is Rs. 100 and you decide to add a markup of 20% on all your products, then your selling price will be Rs. 120. If your product cost is Rs 500, then your selling price will be Rs 600.

summaries

The pricing method you choose for your product will determine the market response. Therefore, choose the strategy that best suits your product and that your customers find most cost-effective. However, as discussed in Competitive Pricing Strategies, you can also offer your customers better payment terms than just competitive pricing. This will certainly increase the likelihood of closing a deal if the customer finds it easy to pay.

Once you have finalised your pricing strategy, you need to choose a payment gateway to accept payments for your products or services. For this, we recommend PayU.

PayU offers your customers more than 150 payment options. With PayU, you can also accept international currencies, catering to a global consumer base.PayU offers the highest payment success rates in the industry, allowing you to offer your customers better prices and more convenience.

common problems

Is there a pricing strategy that allows me to charge different prices to different customers? If you want to charge different prices to different customers, you can use a dynamic pricing strategy. This is one of the most flexible pricing strategies where you can charge different prices based on customers, demand, supply, etc.

Are there any disadvantages to the dynamic pricing approach? Yes, dynamic pricing strategies are not suitable for all industries, especially price-sensitive ones.

What factors should be considered when implementing a geographic pricing strategy? Various factors need to be considered when implementing a geographic pricing strategy, such as demand, supply, overheads, taxes, subsidies, transport and manufacturing costs.

How to make a high price skimming strategy successful? In order to make the high price skimming pricing model successful, companies need to demonstrate the quality and uniqueness of their products to their customers.