Competitive Pricing Strategies in Marketing
Competitive pricing strategy is an essential thing for any sort of a business. This is one of the best ways by which a business can know that how they should price a specific product. This sort of pricing strategies in marketing helps a business to maintain such a profit margin which is good and it also helps a business to keep up with their competitors.
Pricing Strategies in Marketing
How will a consumer choose one retailer and he will not opt for the other one if the product prices are the same? By lowering the price of a product will not solve the problem. This may also not result in increased sales. There are chances that if a retailer gives the best information about a specific product, the team of customer service is answering the problems of customers carefully, products are being delivered on time then there are more chances that customers will be attracted towards buying more products from a particular business.
By offering those types of services which prove to be beneficial for one’s customers can result in maintenance of the old customers and in this way a number of those customers who are new can also be maintained.
There are a number of pricing strategies which can be picked up by a business. The selection of these strategies of pricing depends upon a number of factors. If one wants to create any sort of a strategy of marketing then the component that counts a lot in doing this thing is pricing. Price of a product is one of the most important things that a particular consumer takes into account before he plans to purchase any product or services. This is one of the important deciding factors for any consumer. Keeping this thing in mind a number of competitive pricing strategies can be followed. A few of these strategies have been discussed below
A number of products that are being advertised and they are being sold at that price which is below cost in order to attract a large number of customers towards your business on such an assumption that once customers start buying your products then they will be handled somehow to pay the full price of a particular product or service which they are going to take.
In this regard, what loss leader does is that it is able to introduce a number of new customers to a company’s products. This is done so an entirely new customer base is built up and it may also be done in order to secure that revenue which may recur in the near future.
This type of competitive strategy of pricing benefits a number of online shoppers. But one should be aware of this thing that a customer might be leaving with an only lost leader which is being paid for and they might be gone from one shop to another shop only to pick for those bargains which may result from loss leader and this thing is also known as “cherry picking”.
This type of technique of pricing is being used in order to choose such type of price which is attractive. This thing is based on the target customer’s demands and their certain needs. This type of pricing is appealing towards a customer’s emotional side rather than their that side which is rational.
If the price of a specific product is high then there are chances that a variety of customers may prefer buying your products because they are good quality wise as compared to those products which are being offered by one’s competitors which are low in their quality and they are even charged less by your competitors.
On the other hand, most of the people may also prefer buying high-quality products if they are priced less by you than your competitors. This may also be beneficial for a certain business because if even high-quality products are charged less then it can add towards business profitability. Like this sale of a particular business will also increase and more customers will be attracted towards buying your products and services.
Another type of pricing is the pricing which is known as odd number strategy of pricing which is competitive. This is done in order to let the customers know that best prices have been set by retailers for their different customers.
Amazon is the best tool when one talks about dynamic pricing. Amazon is able to maintain its that reputation which is low priced by the undercutting of those competitors which are at the top of the list in selling products this may also include those products which are of high visibility by the protection of margins. This is done either by charging more or by charging of those items which are less sensitive to price.
Dynamic pricing is that sort of a capability which is critical in order to compete in the business of e-commerce. It also helps stores in driving revenue and to margin their growth. In order to build a certain case for that sort of pricing which is dynamic retailers should first be quantifying such potential in which there is an introduction to dynamic pricing. This can be done by the systematic comparison of a company’s price level to a number of their competitors. This thing can be assessed by how frequently one’s competitors are changing the prices of their products and then studying that how a number of your competitors are reacting to the change in the prices of one’s products.
Dynamic pricing should be checked for a variety of products and if one is able to achieve success due to the presence of such a pricing then one is able to see improvement in their revenues this may also include an increase in a company’s profit. Like this, the profits of a company are more likely to be increased from before. This may also result in a different perception that a customer may have about the price of a product.
Companies or businesses who want a large number of customers should always follow a technique of “temporary discounts”. This is important because if a customer wants to buy his/her favourite product but he is unable to get it because of its higher price then the price of that product can be lowered or discounts can be offered. This thing will help the customer and it will be beneficial for that business too. As more customers will prefer buying their favourite products at a discounted price. Like this sale of a company will also increase and a large number of profits will be earned too.
One should always try to include a well-defined range of products. This means a variety of products should be available which may have a different range of price this may also include a product’s standard and its budget. Other features on those lines which are on the high end may not be costing much but these things can help an individual to increase their prices significantly.
Increased profitability which is being offered by the price lining can be considered a reason that departments of marketing are introducing a variety of ranges. With this sort of price lining, only the needs of different customers are not being fulfilled in fact, it allows one’s customer in buying those models which are more profitable and are priced higher.
This type of bundling of the product allows one to charge that competitive price which is unique and which is difficult for others to copy. A wide range of products or a number of components is packed together for such a price which is single. This thing in return provides benefits to a business including its customers. The retailers which are related to electronics are often bundling software which also includes accessories and hardware.
Bundling is being done by a variety of companies so they can pack away those products which are less popular amongst those products whose demand is higher. A number of those opportunities can be created which are long term for a variety of add-on sales. This thing can be adopted when one is selling a wide range of products to their customers. If the product bundle that is being addressed is fulfilling a customer’s needs and demands then this thing can be very convenient because then that specific customer can purchase a number of items in just a single go.
The thing which is being experienced by a number of customers is the “economies of scale” when they buy a variety of bundle of items. This is done because if they needed each and every component of that bundle then they for sure wanted the whole bundle price is lowered down rather than buying each component separately.
One should always try to make up for those relationships with their customers which are long term. Short term relationships should not be made as they will benefit a certain business for a particular period of time. Long-term relationships are beneficial as most of the profits that are being earned by a specific business are because of those customers who have a long and healthy relationship with a certain business or company. When one is able to track the performance of bundling then one may achieve the satisfaction by their customers and this may help one in driving those benefits which are of long-term rather than those benefits which are of short-term. Customers are an integral part of any company. So in this regard, having good relations with your customers may always drive one towards success.
Adopting New Ways of Packing Products
If the packing of different products is done in a variety of ways which differ from one’s competitors then this can prove to be beneficial for one’s business or for a certain company. Most of the customers also prefer buying a particular product because of its packing style towards which they are being attracted.
If a product is packed in the same way on a daily basis then it may not attract a variety of customers and they will prefer buying those products by one’s competitors which packing wise also attracts them. Another thing than pricing which may attract a number of customers towards your product is the shape of a particular product. Some products may have more capacity to store in things or they may have more liquid capacity in them. Customers may prefer buying the same product from one’s competitor if the shape is such that it has more of the same thing which a specific company is not able to deliver to its different customers. Like this shape also matters to a variety of customers. It’s not only the price that may matter to them. So this is an important thing that should be kept in mind before one tries to sell their products to different customers.
What retailers need to do is that they should always ask for that price from their customers which is right and this should always be done at the right time. In this regard, one should be implementing different strategies related to pricing of a product. In this case, one can always make use of pricing software and like this, it is easy for a company or business to stay competitive.
A company should also be able to revise their structure related to the pricing of a product. This is an important aspect because if the same price is being offered from the start then customers may not prefer buying a particular product. This is important because market rate does change they do not remain the same for a longer period of time. So this thing should be kept in mind before one tries to introduce any sort of a product in a market.
The techniques of pricing which have been discussed above should be used by businesses in order to succeed.