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Price - Coggle Diagram
Price
The main methods of pricing
Cost-plus pricing
The cost-plus pricing method is a company's practice, which is to determine the material cost and then add extra money in the price to determine the sales price to the customer. This is usually about the material cost, the direct cost, labor costs.
Competitive pricing
A company can set up the price which is lower than other rivals. The customers may want to buy their products.
Penetration pricing
Penetration pricing is a new marketing strategy use to attract customers at lower prices with the new products or services.
Skimming
Skimming is a firm charges the highest initial price that customers will pay and then lowers it over time.
Promotional
This is a way of promoting the product by making the price more attractive, often when the product is first introduced.
Lose- leader pricing
The loss-leader pricing is a product or service sold with the price which below the shop price, which may can't get the profit. However, that can attract customers to buy the other stuffs.
about the life of product
In the introduction stage, sales growth is very slow. Few people know the the products, which leads to few people buy the products.
In the growth stage, more people know the advantage about the products. More and more people want to buy the products. The profit is rising. The rivals also come into the market.
In the maturity phase, almost potential customer have been reached. The market shares are divided into many parts which belong to many company. The competition is very strong.
In the decline stage, the products are not fashion. People will prefer some thing new. Few people will buy the product. The profit are reduced.
In the development part, this stage not only about building the product, it includes carrying out research and testing too.The company invest much money on it, however there is no profit. This stage prepare for the next few stages.
definitions of pricing strategies
Price is the value that is put into a product or service. A pricing strategy takes into account production costs, the degree of competition, and the stage in the product life cycle. amongst others. It is targeted at the defined customers and against competitors.