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Volume discount pricing strategy

volume discount pricing strategy

While there is no single recipe to determine pricing, the following is a general sequence of steps that might be followed for developing the pricing of a new product: Develop marketing strategy - perform marketing analysis, segmentation, targeting, and positioning.
Determine price us appliance coupon code 2014 sensitivity A higher price typically means lower volume.
The unit cost of the product sets the lower limit of what the firm might charge, and determines the profit margin at higher prices.Common objectives include the following: Current profit maximization - seeks to maximize current profit, taking into account revenue and costs.Company C regularly evaluates their competitors prices to make sure theyre delivering on their promise.Often, a standard storewide 5 to 10 Anchor Pricing discount is enough to create a memorable sense of value that brings shoppers back for more.versioning, create a Pricing Game Plan ยป.At a cinema, customers who paid full price, used coupons, received discounts (senior, student, under 12, AAA) or purchased prepaid discount passes from Wal-Mart can all be sitting next to each other watching the same movie.Much of that results from the carefully selected positioning and branding over the past five years.The purpose is to have a few great deals that draw buyers in with the hope theyll also buy profitable goods.Company C provides business consulting services.

Those who drop out are in essence saying, "I know others are willing to pay higher prices, but I just don't value the item as much as they.".
Current revenue maximization - seeks to maximize current revenue with no regard to profit margins.
As the product lifecycle progresses, there likely will be changes in the demand curve and costs.
Anchor Pricing can actually work well for small sellers.
Do you need what youre currently paying for?Start a free trial today.You might find that your handmade goods sell in lower volume, but at higher prices.Yet you may generate more total revenue and/or profit with fewer units at the higher price; it depends on how sensitive your customers are to price fluctuations.Discount Pricing is best for volume-driven businesses that can garner lower prices from suppliers due to volume purchasing.