Introducing new products in the market acts as a great opportunity for the retail companies to attract new targeted customers and increase the sales and revenue of the business. When introducing the new products, the most vital component that is to be considered is which pricing strategy to choose from so many available options. Now that it is a challenging decision, it is with the help of retail price optimization software the company can analyze the relevant data and make the right decision.
In this guide, we have mentioned some leading pricing strategies for the new retail products that can get you started.
Price skimming strategy:
In this particular pricing strategy, the company initially sets the higher price for the newly launched product and reduces the price of the same product with time. This strategy allows the company to earn higher profits in the early product lifecycle from the customers of all market segments.
When opting for a penetrative strategy, the main motive of the company is to capture the maximum share of the market, and thus, the initial price set for the new product is very low.
High-low pricing strategy:
When using the high-low pricing strategy, the retail company sets the high price of newly launched products. But also offers high discounts and promotions during the sale of the products. The main aim for setting the price high is to indicate to the market that high value is being delivered to the customers through such product which further makes sure that enough interest is generated among the customers. The retail companies to attract new targeted customers and increase the sales and revenue of the business.
Freemium pricing strategy:
Freemium strategy is the most common product pricing model that is being used by the retail sector. This particular strategy itself has many different variants. According to one specific variant, the newly launched product, for some time . Is offered for free to the customers and when the product is accepted by them. They are supposed to purchase the license to continue using the same products. Another variant offers the free usage of a new product till the time when the threshold limit is hit.(Number of users or transactions). After the completion of such a limit, the customers are supposed to buy the product.
Bundle pricing strategy:
In this specific pricing strategy, the customers are offered a complimentary product along with the new products. By the companies at a price that is much lower than the sum of individual prices of both the products. The products are usually packed together in a bundle. Using this type of strategy, a company can prevent price erosion . As it allows separating the discount from the individual product.
In addition to the above-mentioned pricing strategies, there are many other options available. When thinking of which pricing strategy will work for your new product consider using the retail software price optimization as a third-party solution. This particular software helps the company to analyze consumer behavior . And determine the perfect price and thus, the pricing strategy for the newly launched product.