If Product A & B are identical, what can be a reason that Product A sells 5x more than B successfully? I love button up short sleeve shirts, I usually buy them at $15-$30. I came across one I loved, but it costs a whopping $85...
I believe that if you dream to become a premium brand using bold pricing positioning you have to follow the price positioning strategies. Each strategy has it’s own advantage. Let us look at them one by one.
1. Skim: This strategy clearly positions your company above the rest; it tells consumers something is special about your products. We can smell the fried onions and seared, aged prime meat already. To skim, set your prices higher than the competition does to “skim off” customers who are willing to pay more.
2. Match: This strategy puts your pricing on par with the competition, but not necessarily for all rates. To match, set one rate comparable to your competition and another slightly higher. This allows you to stay competitive for a larger pool of customers yet does not undercut the competition.
3. Surround: This strategy positions your first room type as the cheapest in the market but offers your rooms with better options at a price that’s close to your competitors’ first available rates. Hence, you are “surrounding” the middle market, hoping to capture customers willing to pay in those ranges. For example, look at Sizzler’s $16.99 sirloin steak and lobster special.
4. Undercut: By undercutting your competitors’ rates in some categories, you can potentially attract more customers. Take this example from the hotel industry.
5. Penetrate: Being the low-priced option in your market has benefits and drawbacks. For new establishments, low prices often seem the best way to entice consumers to try their products. Do your prices reflect how consumers value your hotel or restaurant? Here is what consumers see as they peruse online hotel options; those using penetration pricing certainly stand out.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Answered 2 years ago