Business organizations are the World supposed to embark on proper ways of strategizing their prices in order to maximize and economize their products. Firstly discount pricing is considered by many manufacturers since consumers love sales, coupons, rebates, seasonal pricing among other promotions that the business may decide to offer. This is done to increase the number of customers into your store, hence helping to offload the unsold inventory, and attracting a more sensitive group of clients. However, this method should not be used so often since it may turn consumers to view you as a bargain retailer and may stop them buying your products for various prices.
Another method or strategy that a business needs to adopt for it to prosper is the leading loss pricing. This is where an individual company sells a product that is highly needed in the market and which are in high price at a lower rate than the other business to lure consumers to buying other product that the buyers never anticipated to purchase. This tactic can work better when you consider complementary or additional purchases a consumer will make hence resulting in a boost in overall sales per customer.
Thirdly a business may engage its buyers into psychological selling. This is where a business may end the price of an individual product with an odd number for example 5, 7, 9. For example $9.99 instead of $10. This tactic taps into the irrational part of a consumer's brain and hence triggering impulse buying. However, this method can be dangerous when selling luxurious goods that are of high value. Hence once you lower the price of a whole number from $2,000 to$1999.99 consumers perceives the product to be of little value hence reducing the volume of goods sold.
One can use below competition tactic to lure your customers to buy goods from you. According to this tactic, a business decides to use other competitors pricing data as a benchmark hence pricing products below them to lure consumers into your store over theirs. This strategy can be suicidal if you manage to negotiate with your suppliers to obtain a lower cost per unit while at the same time focusing on a way to cut costs to promote your special pricing. However, this may be difficult to sustain when you're a smaller retailer given the lower margins you'll be making.
A business that may want to prosper may employ above competition tactics' this is where a retailer benchmarks his/her competitors by consciously pricing his product in a higher price than the exact price in the market hence branding your product as being luxurious, prestigious, or exclusive from others. For example an Economist Richard Thaler's study showed that people who were hanging on a beach tended to buy beers from a hotel which managed to sell at a high price than others due to the perception that the beers from that hotel may be so luxurious and exclusive. This tactic brings the knowledge that an individual product are of a high quality and more premium due to the amount they would be paying for them.
In conclusion for a business that needs to prosper has to employ all the above tactics that have been mentioned. This may result into offloading the inventory in the store.
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