Demand Based Pricing Strategy

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Demand-based pricing strategy is where prices are set according to demand to maximize sales during periods of high demand. Take airlines for example. During periods of high demand, such as holiday seasons and weekends, prices increase as demand increases and vice versa. The hotel industry often follows a similar strategy.

Penetration Pricing Strategy
This strategy is typically used to enter a new competitive market. Sellers enter the market at a lower price to build demand and a consumer base, and then raise their prices once they have captured market share.

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Competitive Pricing Strategy
In the ever-increasingly competitive retail market, competitive kazakhstan phone number list pricing strategy is quickly becoming one of the most sought-after approaches. When it comes to competitive pricing strategy, an important criterion is the purchasing behavior of customers. Once a product becomes part of a mature market and is fighting against a relatively large number of substitutes and competitors, the pricing actions of your competitors may well become a factor determining your profits. This is where setting prices in line with competitors becomes one of the most popular pricing strategies, also known as competitive pricing strategy.

You have three options to choose from – whether your product price is lower, higher, or the same as your competitors:

1. If you plan to set a price higher than your competitor's price, you will need to add new features and improvements to your product that will justify the price increase.

2. Pricing below your competitor's price depends on your resources. If you can increase volume without significantly affecting your production costs, this may be a good strategy for you. However, there is a risk of lower profits, and you may not be able to recoup the costs involved.

3. When you price yourself the same as your competitor, differentiating factors cease to exist. The focus shifts to the product itself, and if you can offer more (and better) features at the same time, it's a win-win for you, and customers will start buying from you.

So, competitive pricing strategy is a game that needs to be played. Competitive pricing analysis requires that you have a deep understanding of your market and target audience.

A lot of effort goes into the process of setting prices based on competition. According to a recent survey, minor price fluctuations can reduce or increase profitability by more than 20-25%. Competitive price analysis is essential for competitive pricing strategies. Let's look at some competitive pricing examples to better understand this process.

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Examples of competitive prices
The concept of competitive pricing is best understood when there are only two competing parties. For example, if two companies produce laundry detergents, both brands will try to keep their prices in line with each other and advertise their product to stand out for its quality and features, to compete with the other brand.

Even large corporate giants sometimes resort to competitive pricing strategies when they want to increase market share. They must set a price that is almost equivalent to their competitor, even if the production cost is high. In case the production cost is higher, they will have to experiment and adjust the prices for packaging, advertising and distribution.

With nearly 92% of shoppers comparing prices when shopping online, many businesses have to resort to a competitive pricing strategy to ensure that their customers don’t switch to another competitor due to their low costs. In most cases, competitor analysis and benchmarking tools are key decision-making resources when setting competitive prices. With these intuitive pricing tools, retailers can optimize their prices in near real-time to take advantage of market movements while maintaining business profitability and gaining an edge over their competitors.