Presentation : Pricing Tactics
INTRODUCTION:
A pricing strategy is a model or method used to establish the best price for
a product or service. It helps you choose prices to maximize profits and
shareholder value while considering consumer and market demand. If only
pricing was as simple as its definition — there's a lot that goes into the
process.
3 Prcing Strategies:
1. Cost-Based Pricing:
Explanation:
Decide how much it costs to make your product.
Add a little extra (profit) to cover your expenses.
That extra amount is the price you set for your product.
Pros:
Easy to figure out.
Makes sure you make a profit.
Cons:
Doesn't think about what customers think is a fair price.
Ignores what other similar products cost.
2. Value-Based Pricing:
Explanation:
Think about how much your product is worth to customers.
Set the price based on how much people are willing to pay for those
benefits.
Pros:
Considers what customers value.
Can charge more for things customers really like.
Cons:
Tricky to figure out what people are willing to pay.
Needs good communication about why the product is worth the price.
3. Competition-Based Pricing:
Explanation:
Check out how much other companies are charging for similar stuff.
Decide if you want to charge less, the same, or more than them.
Pros:
Gives you an idea of what's normal in the market.
Helps avoid a big price war with competitors.
Cons:
Ignores what customers might want.
Might not be the best strategy if your product is special or different.