Problems and Decision Making
Pricing strategy is part and parcel of marketing strategy. This chapter explores these and other topics relating to pricing with the intent of providing practical tools and insights into this important topic. All products should have a calculated price range, as opposed to one specific and fixed price. Multichannel pricing can create internal competition as well as confusion or frustration on the part of the customer. Pricing strategy is defined as price planning as it relates to internal forces and external forces. During the introduction of a new product to the market, sellers seek to generate demand for their product. This may require considerable resources with heavy marketing support. One pricing strategy aimed at gaining market share is penetration pricing. With penetration pricing, the price of the product is set lower than the laws of supply and demand would dictate with the aim of building market share.