Pricing and Distribution Strategies: A Business Analysis
Classified in Economy
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Pricing Strategies
Price is the consideration that the consumer is willing to give in exchange for a product.
Three Key Pricing Strategies:
- Penetration Pricing: Entering the market with low pricing, often in a "closed market." The disadvantage is that these prices are below the optimal price, making it difficult to raise them later. Raising prices after establishing a low price can lead to a decrease in demand.
- Maximum Pricing: Setting very high prices to maintain a premium image, potentially sacrificing sales volume. This policy is often short-term, as competitors may offer lower prices.
- Undertaking Prices: This strategy doesn't define the true price initially. It allows for price increases without significant impact because the initial price wasn'