ABSTRACT
This chapter talks about the five pricing strategy options for new products. With launching new products, strategies such as skimming a market with high prices, penetrating with low prices, using odd or even prices, or following the market leader are strategies determined by a wide range of factors. Such factors include market share and competitive position, product image, speed of market entry, time needed to recover the investment, and how far behind the competition is with a similar product entry. Cost-plus pricing entails basing price on product costs and then adding on components such as administration and profit. Slide-down pricing is best utilized in a proactive management mode rather than as a reaction to competitors’ pressures. Preemptive pricing is used to discourage competitive market entry. Pricing a product low to attract buyers for other products is called loss-leader pricing.
