Pricing Strategies Price is the value of any particular product or service provided by a business. A pricing strategy is a method that a firm uses to determine its products or services. Prices vary depending on the customer's needs and the seller, but factors of production such as labor and capital are more prioritized in a pricing strategy (Keränen,2017). Methods can either be long term or short term depending on the marketing plan of a firm. Pricing strategies include penetration, price skimming, value-based, competitive, and cost-plus pricing (Hinterbuber,2015). Competitive pricing is the setting of a price depending on what fees your competitors charge on their products. Value-based pricing depends on how much a customer thinks your product or services are worth. Simultaneously, price skimming involves setting high prices and lowering them depending on the market situation. Penetration pricing is the method of setting relatively low prices for a product so that you can be able to enter a highly competitive market then raise them later once you've got a market base. As the last pricing strategy, cost-plus pricing is the simplest form of setting prices. It is the simple act of calculating the costs of a product or service then adding a mark up on top of it.
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