Pricing strategy

Methods of pricing

Cost plus




Price skimming


Cost plus pricing

The total cost of producing a product is calculated, and after that a mark-up is added to calculate the price


Competitive pricing

The price is calculated after keeping in view the price of competition. Competitive price is normally kept just below the price of competition



This is also known as “playing with mind price”.

For example keeping $5.99 price instead of $6


Penetration pricing

Penetration pricing is when a low price is charged in order to attract customers


Price skimming

A high price is charged for a product or service because it either new or of high quality

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