the company's policies and
strategies as well as the market environment, the objectives of
the pricing policy
can be :
- Profit maximization – high prices for high quality
products with weak competition.
- Sales maximization – low prices based on low costs:
- when the demand is price elastic
- low costs due to economies of scale
- discouragement of competition
- Capitalization of competitive advantages – high prices for
products that are absolute novelty on the market, followed by
diminishing of the prices as the competition tightens or a market
segment with lower income is on the focus.
- Promoting an exceptionally high quality product – high
prices that suggest that the product is very qualitative.
- Survival – low prices for a short period to sell off the
Depending on the pricing policy's
objectives, a company can adopt various pricing strategies that
would, on a medium or long term, achieve the objectives.
The main pricing strategies are:
- Price stratification strategy – different prices for
different market segments. The products have different features,
although they satisfy the same need, and are sold at different prices
depending on the purchasing power of each segment.
- Psychological price strategy – high prices that suggest
high quality, .99 prices.
- Penetration pricing – low prices in order to attract the
customers fast, due to high threat from competitors.
- Promotional pricing:
- Selling at a loss
- Special prices for special events, holidays
- Purchases on credit with low interest
- Psychological sales(high prices, followed by substantial
- Discount pricing
- Quantity discount
- Seasonal discount
- Cash discount
- Commercial discount