How can businesses find the perfect balance between profit maximization and customer satisfaction through pricing?

Look through your local newspaper or any direct mail marketing pieces you can locate. Choose a product or firm and note the prices for different types of products. What do you think the firm’s pricing objectives and strategy are? What types of pricing methods are they utilizing?

Discuss the relationship of price to value. Does a low price necessarily mean a better value? Give an example to illustrate your opinion.  How can a firm offer good value in a mature market where price seems to be the only visible means of differentiation?

What economic factors should a marketing plan consider to optimize pricing strategies for a new product launch?

How can pricing be used as a tool for market segmentation and targeting?

Penetration pricing and price skimming are marketing strategies commonly implemented when companies launch new products or services. Both approaches have worked for businesses, but you have to understand how your price relates to your overall marketing and promotions strategies. Penetration pricing relies on a low upfront price to attract customers, while skimming is the use of high upfront prices to maximize short-term profits from the most eager and interested customers. Compare and contrast market skimming and market penetration pricing with the help of above definitions. Discuss how companies adjust their prices to take into account different types of customers and situations?

When you evaluate the three major pricing strategies (namely value-based pricing, cost-based pricing, and competition-based pricing) you will see that each has strengths and weaknesses