The pricing strategy for goods or services is dependent on several factors like
industrial growth, market conditions, demand, competition and customer
psychology. The pricing strategy being developed by a company for its product or
service may be for maximizing profit, penetrating the market, reducing inventory
etc. Let us examine some of the pricing strategies.

1. Penetrating pricing.
   This pricing strategy usually evolves with regard to the launch
   product/service of a new company. The price being offered to the
   customers for the product or service will be substantially low on
   comparison with the price of the competitors. This is done to gain more
   initial sales, draw new customers and churn customers from the
   competitors. Market penetration is the main reason behind this pricing.
2. Premium pricing.
   Here, prices are set for the product /service at a much higher level than the
   regular market prices. This is done to create a feeling of higher perceived
   value among customers, signifying high quality, luxury or premium. This
   strategy works well for a set of target audiences who are quality or brand
   conscious.
3. Bundle pricing
   Here two or more products are bundled together and sold at a price. The
   single combined unit is set at a lower price than if they were sold
   individually.
4. Competitive pricing.
   This usually takes place in a saturated market/industry. Here the price of
   the products/services will almost be in par with the competitors in the
   market. This strategy is all about almost always following the same market
   rate.
5. Dynamic pricing
   This pricing is dependent on the current or prevailing demands in the
   market. Here we see that prices fluctuate in a period of time. This pricing is
   more dominant in the hotel and airline industry.
6. Value pricing
   This is about offering good products and services at affordable/reasonable
   price. The pricing is dependent on the value it brings for customers. This
   pricing strategy should create a feeling amongst customers that there is
   value for money.
7. Psychological pricing
   This pricing is adopted after understanding the psychology of the
   customers. A slight altering with respect to product positioning, packaging
   or pricing can shift the customers focus. Ex Rs 9.99 Vs Rs 10, buy two get
   one free etc.
8. Cost plus pricing
   This is a pricing strategy we adopt by calculating the cost incurred towards
   producing the product and the profit margin we foresee by sale of the
   product. Here profits are predictable.
9. Economy pricing
   Prices are below those of your competitors. This is expected to bring in
   higher sales volume which can lead to profits.
10. Skimmming pricing
    Here a new product entering the market is priced at premium. However the
    price of the product undergoes a decline over a period of time. This price
    erosion will be more in line with the declining stages of the product life
    cycle.