There are several pricing strategies which the marketers adopt for flourishing their business such as discussed below:
Premium pricing: In this strategy, there is high pricing kept for the specific segments and industries. For instance, Porche in cars and Gillette in blades for men and women.
Penetration pricing: In this strategy, the price is kept low in the beginning for adjusting in the market. This is done when a new product is launched in the market. For instance, Mobile phone rates in India.
Economy pricing: In this strategy, the target is on the target market with high pricing scheme. The advertising and overhead costs are very low. For instance, Friendly detergents used for washing such as Nirma (Indian Brand) and local tea producers.
Skimming strategy: In this strategy, the prices are kept high till the time, the competitors allow and then the prices are dropped low. This approach is adopted for earning maximum profits before the product attracts more competitors who will lower the profits to be earned. For instance, VCRs, and mobile phones introduced in the Asian markets.
Hence, the above pricing strategies when effectively incorporated in the business goals would ensure to make the business make more profits even in the global marketplace.
Therefore, the above points state that both social and cultural elements have the direct impact on the consumer behavior in the domestic and international markets when devising the market entry strategies and when promoting the products and services in the market (Hofstede, 2001).
Despite the apparent simplicity of using pricing as a major marketing tool, many managers find pricing decisions difficult to make, especially in relation to international markets. Why is the development and implementation of pricing strategies much more complex in the international context?
In order to remain competitive, the companies make efforts to do the business in the global market. The pricing strategies are put forward by the companies so as to take into account the different segments, assess the ability of the consumers to pay and understand the competitor actions in the global market (Best, 2012).