There are several pricing strategies used by suppliers:
Cost-plus pricing – Total variable + Fixed cost + profit
Premium pricing – based on branding. Supplier determines to charge a very high price, not connected with cost structures, usually based on its reputation and/or the perception that the product/service is of
a superior quality. This strategy typically found in the early part of the product life cycle/when demand exceeds supply.
Penetration pricing - Supplier attempts to enter a new market or extend its share in an established one. It is characterised by price reductions to increase volume, followed by steady price increases; may
even be loss leading at start (no profit made)
Marginal cost pricing – covers only variable cost
Market pricing – suppliers prices in line with what the market is willing to pay
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