A Strategically Formulated Pricing Model:
Regardless of your feelings about pricing, strategic pricing is often the starting component of competing in the brandscape. Although less attractive than the other aspects of marketing, at Strategic MMC, we draw the art out of pricing.
To start on a pricing strategy analysis, we first assess the fixed and variable costs. This also includes an overview of your and the competition’s current market price-points. We use this information to create a value scale. This scale affords us a visual representation of the current state of the market.
Second, we settle on a target group and entertain the nine laws of price sensitivity and consumer psychology. These elements often help us not only reach the fringes of market-acceptance, but uncover a baseline for various pricing strategies and how they factor into the competitive brandscape.
Next, we entertain a creative exercise through differentiation and positioning strategies that place your offering at each level of the value scale. Here, we identify the value that your current pricing and strategies have generated. If the goal is to disrupt the status quo, we often review how to best reach the fringes of the market.
Finally, we utilize this information to work through about 25 different models of pricing to identify acceptable models that will connect with both the market and brand image. And what are those 25 different models? Well, for your viewing pleasure, here’s the list;
- Absorption pricing
- Contribution margin-based pricing
- Creaming or skimming
- Decoy pricing
- Freemium
- High-low pricing
- Keystone pricing
- Limit pricing
- Loss leader
- Marginal-cost pricing
- Cost plus pricing
- Odd pricing
- Pay what you want
- Penetration pricing
- Predatory pricing
- Premium decoy pricing
- Premium pricing
- Price discrimination
- Price leadership
- Psychological pricing
- Target pricing business
- Time-based pricing
- Value-based pricing
- Variable pricing strategies
- Yield management strategies