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Penetration Pricing, Cost-Oriented Pricing, Skimming - Coggle Diagram
Penetration Pricing
Pros
Some of the pros when using Penetration pricing are lower production cost and more sales or usage. More people are attracted to your product because of the lower price
Cons
Some of the cons are not as much profit some people might leave when the price raises may result in price war over competitors
Facts and Features
Penetration pricing is when a business lowers it's starter price so that it will attract more customers. Most of the time this works and is very helpful to starting a business.
Examples
An example could be a car company offering low lease interest and another example could be a website offering a free trial for their service when other mainstream websites there is no free trial.
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Cost-Oriented Pricing
Pros
A good amount of profit for the business, More attractive to marketers.
Facts and Features
Cost oriented pricing is when a business adds a certain amount to a product to make a profit on the product
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Examples
An example could be building a house the builder will build the house for what it costs and add price to it to make a profit.
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Sub Category
Mark ups
Markups are when the company takes the original price of a good and adds some more money to it/ makes it more expensive than it actually is.
Skimming
Pros
The companies gain a lot of profit, the demand for their product rises and they still make a lot of money
Cons
Some cons are this strategy could create competition between businesses and it could cause customers to leave based on the other competitors prices
Facts and Features
Price skimming is when you sell something for as high of a price as you can while customers are still buying it. Sometimes this creates competition between prices and the companies gain a lot of profit
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