Rather than focusing on production costs or the item’s value for the customer, this pricing method relies heavily on market data. You need to determine the best pricing strategy for your business.Ĭompetition-based pricing utilizes pricing data of competitors for similar products to set a base price for their products.

In the list below, we will review five most common pricing approaches. You can easily win your competitors over by creating a simple, understandable pricing plan that includes customer value at the core.Īs a retailer or an e-commerce player, you must decide right pricing strategies before advertising products to customers. It is vital and something we have seen multiple times: sticking to a simple pricing strategy works best if it delivers the value the customer wants. You can consider aspects like competitor actions, market conditions, consumer trends, and other variables, including product costs, to account for the pricing model of your goods. Now you must consider some tactics to make your prices and strategy work.

You have decided your position in the market, you are clear on customer value and how your pricing delivers it. Let us assume you are an eCommerce company. Does your pricing strategy deliver customer value?Īre your customers in search of low prices or a premium service and experience? Customer value is the core of your pricing and you should integrate your pricing strategy into your marketing strategy.

Example penetration pricing