The 5 most common pricing strategies: pricing plus costs. Calculate your costs and add a profit margin, competitive pricing. Set a price based on what the competition charges, saving prices. Set a high price and lower it as the market evolves, penetration prices.
Market penetration prices are those at which a company sets a price for its products that is below current market prices. This strategy is more common for commodities in mature markets with high price elasticity; in other words, for products where demand changes dramatically with small changes in price. A pricing strategy is a model or method used to set the best price for a product or service. It helps you choose prices to maximize profits and shareholder value, taking into account consumer and market demand.
It's one of the most common pricing strategies, but many people use it the wrong way.