The Price Strategy Matrix focuses on the different approaches that different companies and organizations use to figure out what to price their services and products at in an appropriate and correct way that aligns with the current demand on the market. These strategies help you as a company to understand the right price for your product. There are several different factors that need to be considered when setting a price for the product or service. These include your target audience, the financial product, the brand marketing objectives, the core business objectives and more. You also need to think about things like your market position, dynamics, competitor activities and more.
The Price Strategy Matrix allows you to understand the different levels of quality and price and how they combine to show different parts of pricing strategies. These include economy pricing, penetration pricing, price skimming and premium pricing. Economy pricing is good for when you have a lower overhead than your competitors might. This will let you sell the product or service at a discounted price to get a higher market share. Penetration pricing focuses on setting a low initial price on a top quality service or product that allows you to penetrate the market quickly and get you foot in the door when launching a product. Price skimming is when you set a high price on a low-quality service or product to get as much revenue as possible from those who are willing to pay. Finally, premium pricing is when your production costs are high and you have a unique enough product that you think it can appeal to those who will pay top dollar for it. Use Price Strategy Matrix PowerPoint to determine this.