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Beyond your different marketing strategy,
there are other elements of it that you have to reflect on.
You have to reflect on your pricing strategy.
Here you've basically have five models on how to determine your own pricing strategy.
You can have a cost-based pricing.
The idea here is that the sale of each product should generate value for the company.
So you base your overall price on the cost of
the product and then add a percentage to that cost as a profit margin.
You can have competitive-based pricing,
where you do an overview of competitors
selling a similar product or occupying a similar space,
and adjust your price relative to your strategy.
If you had a strategy of marketing penetration,
then you will set your price lower,
engaging in penetration pricing.
If you had a strategy of doing pricing distinction and
trying to set up yourself as a premium high-quality device,
then you would try to price it higher,
engaging in premium pricing.
Customer value-based pricing is
pricing the product based on what the customer is willing to pay.
This basically entails doing market testing,
consumer survey to properly determined the price where you should be selling at.
Price skimming is the strategy that you
use when demand for the product is quite elevated.
Early adopters that really want your product and
are not price sensitive will pay top dollar for it.
As time progresses, the price of your product lowers,
which increases velocity until you reach your target price.
The last model, freemium pricing,
combination of free and premium,
is mostly used with digital products,
whereas the main product is offered for
free and the customer has to pay premium access for advanced features,
services, subscription models, and so on.
This is mostly used in the digital space,
but we've seen similar approaches,
for example, in other markets such as printers,
where the printer is sold at a very discounted price and you have to
pay for the ink cartridges at a very high price once you're locked into your device.
