Competitive Pricing

Pricing Methods

• • Penetration Pricing

  • Price Skimming

• Competitive Pricing

  • High-Low Pricing

  • Freemium Pricing

  • Value-Based Pricing

  • Cost-Based Pricing

  • Simple Mark-Up

  • Contribution Margin

  • Simple Prime Costs

Competitive Pricing

This is by far one of the worst techniques for establishing price and should only be used in conjunction with another strategy. While it is often used to make your business competitive, it does not take into account your costs, expenses, or profit margin. The entire premise is to have a price that is consistent with what everyone else is doing.

• • Pros—

    • could raise prices for your products and increase profit margin

    • associates your products with potentially well known, reliable, or quality products

    • allows you to get sales from consumers, if you do a price match of competitors

  • Cons—

    • your costs may be higher then other companies, which would result in lower profit margins

    • you allow others to dictate what you do

Think About It: Competitive pricing

• • Why should you only use competitive pricing with another pricing strategy?

  • How can competitive pricing be beneficial to a business?

• • https://www.bdc.ca/en/articles-tools/marketing-sales-export/marketing/pages/pricing-5-common-strategies.aspx

  • https://blog.hubspot.com/sales/pricing-strategy

  • https://www.investopedia.com/terms/v/valuebasedpricing.asp

  • https://www.pricingbrew.com/insights/value-based-pricing-premium-vs-preference/

  • https://www.seattletimes.com/life/travel/airlines-in-hawaii-price-war-offer-9-inter-island-flights/

  • https://www.webstaurantstore.com/article/129/restaurant-menu-pricing.html