#1
February 8th, 2016, 11:28 AM
| |||
| |||
Premium pricing strategy
What do you mean by Premium pricing strategy, can you here tell me something about it , as my younger brother asking me for it
|
#2
February 8th, 2016, 11:51 AM
| |||
| |||
Re: Premium pricing strategy
Price is the value that is put to a product or service and is the result of a complex set of calculations, research and understanding and risk taking ability, as you asking here I am telling a premium pricing strategy involves setting the price of a product higher than similar products. This strategy is sometimes also called skim pricing because it is an attempt to “skim the cream” off the top of the market. There are several pricing strategies: Premium pricing: high price is used as a defining criterion. Penetration pricing: price is set artificially low to gain market share quickly. Economy pricing: no-frills price. Margins are wafer thin; Skimming strategy: high price is charged for a product till such time as competitors allow after which prices can be dropped. Strategic considerations Information asymmetry (e.g., when buyers have no independent basis to test claims of "exceptional quality" for a particular product or service -- assuming the concept is well-defined to begin with); Market status as a Luxury good or a Superior good; and Market dynamics such as the level of competition and entry barriers. The disadvantages of this pricing strategy includes: not possible with commodity goods |
|