Loss leader pricing: this strategy aims to attract customers by offering a product or service at below cost.

Once the required profits are made, the price is then lowered for a wider market.

Skimming pricing: this strategy sets a high initial price which aims to excite audiences who desire products or services that are in high demand and are highly valued.

Once this point is reached, the prices are increased to normal pricing levels.

Penetration pricing: this strategy provides you the opportunity to set a low initial price on a new product or service to gain high sales or market share.

There’s a number of product-based pricing strategies you can use including: Typically, at a premium price customers have high expectations of quality, performance and service.

Premium pricing: this strategy reflects the prestige, luxury or exclusive value of the products or services you provide.

For example, sometimes customers will pay more if it saves them a lot of time. The value is determined through market testing and a price is set based on this value.

Value pricing: this strategy is based on what customers think a product or service is worth, rather than actual costs.

There’s a number of value-based pricing strategies you can use including: The strategy means you price your products and services close to the market price leader.

Going rate pricing: this strategy is a safe way for small businesses to remain competitive without eating into profits.

When using this method it's important to factor in all your business costs and not overlook taxes, a wage for yourself, superannuation and leave entitlements. The 'per hour' method calculates all the relevant costs of a business at an hourly rate.

Charge per hour: this strategy is often used by service-based businesses and independent contractors.

If your calculations are accurate this strategy can keep your price competitive while ensuring that you still make a profit. Care should be taken when calculating your price to ensure that all relevant costs such as cost of goods sold, fixed costs including Goods and Services Tax (GST) and other taxes are factored in.

Cost-plus pricing: a strategy that adds a small margin or mark-up to the costs of producing and distributing the product or service.

When choosing your pricing strategy, keep your overall marketing strategy in mind to ensure your strategies complement one another. There are a number of pricing strategies you can employ when setting your price, including strategies based on:

When multiple products or services are involved, it's a good idea to be aware of how the prices complement each other. Using price to increase demand in new or existing products or services can be a good objective for establishing customers or boosting lagging sales. When setting prices it's always important to anticipate what your competition will do in response to your prices and ensure that you factor it into your strategy. Remaining competitiveįor many businesses, being price-competitive is important, whether as a price leader or responding to the competition. Price can indicate a level of quality so it's important that the price of your products or services complement your overall brand. For example, your business might sell high-end products, try to compete on price, or get into the budget level market. Positioning can help you establish your products or services in the market. By establishing your pricing objectives early, your choice of strategy may be easier to determine. It's important to keep your business and marketing objectives in mind when developing your pricing objectives to ensure they complement one another.

ability to supply to or increase demand.One objective of pricing is to make a profit on your products or services, but there are many other pricing objectives that can affect your pricing decisions including: A key consideration when you develop your pricing strategy is to understand your objectives when you price your products or services.

Pricing strategy for products