Pricing Strategy for New Product That Leads to Successful Marketing

Pricing strategy for new product is needed by every business owner because it affects the success of a product. Of course, you can’t be careless in setting the price of the product being sold even though it’s new. In order to increase competitiveness in the market, here are some strategies that you can apply.

5 Recommended Pricing Strategy for New Product

1. Price Skimming

In this strategy, business owners can set high prices at the beginning for new products. However, over time the price can be lowered slowly with the aim of maximizing profits from early consumers. This profit is expected before the product enters a wider market.

The application of this strategy is more suitable for unique and innovative products, which seem different from other similar products. Because the number of direct competitors isn’t much, with a high price at the beginning, consumers will still be interested. New gadgets and game consoles are two examples of products that usually use this strategy.

2. Penetration Pricing

It’s the opposite of price skimming because it actually sets a low price for a new product to attract customers. With a low price, usually more people will be interested in buying quickly before the price goes up. Over time, when the product starts to sell, the company usually decides to raise the price little by little.

Pricing strategy in marketing such as penetration pricing are suitable for offering new, common products in the market. Competing in a crowded market is certainly not easy, so setting a low price is key. This strategy is good when business owners have a long-term goal of obtaining large volumes.

3. Value-Based Pricing

Pricing is based on the perceived value that customers feel towards the product, not just the cost of production. So business owners can set prices according to the benefits or solutions offered by the product. One example of a product marketed with this strategy is a beauty product because it emphasizes quality and results.

4. Cost-Plus Pricing

This strategy is done by adding a profit margin above the total cost of production to determine the price. The goal of this strategy is to ensure that profit is achieved for each unit of product. Manufacturing businesses with products that have stable production costs are suitable if marketed using this strategy.

5. Competitive Pricing

Best pricing strategy for new product includes competitive pricing; pricing is based on competitor prices. The prices can be slightly lower, the same, or higher with additional value. If the brand is big enough, then the business owner can dare to take this strategy.

The main goal is to attract consumers from competitors or maintain a position in the market. If similar products are already widely available on the market, the price must be made competitive. This will have an impact, especially on consumers who are sensitive to price.

Pricing strategy for new product recommended above can be applied not only to recover production costs. These methods can also be done to increase market share while anticipating competitor reactions. However, the strategy must be made carefully so as not to be outdone by better competitor strategies.