A high price strategy is a marketing strategy whereby a high price is assigned to a product or service by the manufacturers, retailers or producers of service. This is only one type of pricing method or strategy out of a wide variety of methods that can be utilized for the sale of products or services. There are several conditions under which a high price strategy can be assigned to the sale of such items, including for the uniqueness, the quality, or the rarity of an item, or simply as a means to take advantage of unwary consumers.
When an item is unique from a lot of similar products, the sellers of the item might capitalize on this fact to apply a high price strategy. The uniqueness of the product could be due to any number of factors, including color, rarity, ingredients, presentation or packaging. A good example of this can be seen in the case of the sale of different types of jewelry. When a precious stone is a different color or size than what is the norm, the jewelers will take advantage of the unique attributes to practice a high price strategy. In this case, the price for that particular piece of precious stone might be marketed to consumers at a much higher price than they would normally pay for such a stone, meaning that they have responded to the high price strategy utilized by the marketers of the jewel.
Another instance where a high price strategy might be practiced is when the quality of the item is higher than that of similar items. For instance, if a beauty shop is located in an exclusive neighborhood, includes a lot of extra services, and hires the best stylists in the business, it might effectively and successfully practice a high price strategy due to the value that people will place on the service. Such a value might be due to the feeling of exclusivity conferred by going to that particular beauty shop, even if it charges more than three times what the nearest rivals charge.
The other time when this strategy might be practiced is when the marketers are trying to deceive people in order to make some quick money. In such a case, the value of a substandard good will be marked up and presented or sold at an exorbitant price. People who know what to look for might recognize the scam for what it is, but others might still fall for this sort of gambit. An example is the sale of certain electronic items at expensive prices, even though some of the components used in making them do not measure up to the quality of that in other electronic items that are actually expensive due to their quality.