How Do I Choose the Best Pricing Strategy and Tactics?

For any individual or company with products or services to sell, the right pricing strategy and tactics play a vital role in the marketing process for products or services. Considering the fact that there are many pricing strategies, the determinants for the exact pricing strategy and tactics to apply in a particular situation depends on certain criteria, including the types of products or services, the purpose for applying the pricing strategy, and the environment in which the products or services will be sold. The right pricing strategy and tactics may also be a combination of these factors, including the determination of the target consumer demographic at which the pricing strategy is aimed.

The importance of using an analysis of a target consumer demographic when trying to arrive at the right pricing strategy and tactics is due to the fact that it allows the marketer to tailor the pricing of the products or services to suit the target consumer base. An illustration of this can be shown using an example of a company that produces jeans for teenage boys and adult men. Such a company might decide to fix the price of the jeans for teenage boys according to the perceived financial capability of the target consumer base. In this case, the company will consider the total cost of production or the total costs for manufacturing the jean in relation to the lowest price it can set for the jean and still make a profit. On the other hand, the company might decide that the target consumer base for the teenage jeans will be the children of well-to-do parents, in which case the company would have no compunction in using the exclusivity pricing strategy when deciding what type of pricing strategy to apply.

Another application of pricing strategy and tactics can be derived from the aim of the marketer for the product or services. For instance, the owner of a grocery store who is trying to get rid of products that are about to reach their sell by dates might decide to use the pricing strategy of marking down the products. This type of pricing strategy can be applied in this case due to the fact that the products are about to expire. In such an instance, the grocery store owner would be best served by salvaging whatever he or she can from the products before they reach their expiration dates.