In my previous article, I showed you the "big 4" pricing strategies, but there are other important approaches to pricing that can be very helpful in developing an irresistible price:
- Psychological Pricing — This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis. A wonderful example of this is demonstrated in the consumer’s response to 99 cents versus one dollar. Although only a penny separates the price points, the psychological impact is huge
- Product Line Pricing — Where there is a range of product or services, a scale of prices reflects the scale of benefits offered by the products. For example, a car wash service could offer a basic wash for 10 Euros, a wash and wax for 15, and a deluxe package with wash, wax, and super-buffering for 20 Euros
- Optional Product Pricing — Companies will attempt to increase the amount customers spend once they start to buy. Optional “extras” increase the overall price of the product or service. For example, airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other
- Captive Product Pricing — Where products have complements, companies will charge a premium price where the consumer is captured. For example a razor manufacturer will charge a low price and recoup its margin (and more) from the sale of the only design of blades which fit the razor
- Product Bundle Pricing — Here sellers combine several products in the same package. This also serves to move old stock. Videos and CDs are often sold using the bundle approach
- Promotional Pricing — Pricing to promote a product is a very common application. There are many examples of promotional pricing including approaches such as BOGOF (Buy One Get One Free)
- Geographical Pricing — Geographical pricing is evident where there are variations in price in different parts of the world. One example of this would be where shipping costs increase price
- Value Pricing — This approach is used where external factors such as recession or increased competition force companies to provide “value” products and services to retain sales, e.g. value meals at McDonalds
Direct Marketing