Different Methods Of Pricing: Economics Analysis For Business

1. What is psychological pricing?

Ans. This method cannot be considered a true pricing method but it is rather a price tagging method where the price of the product is fixed in a manner it given an impression that the price is low.
 
2.What is premium pricing policy?

Ans. Here the price of the product is high, higher than the industry price. This idea is to enhance the image of the product as a high quality product.
 
3. What is penetration pricing?

Ans. This is opposite to skimming pricing. Here the seller quotes a price which is very low so as to stimulate demand for the product of the firm and capture a large share of market.
 
4. What is price out pricing?

Ans. This strategy adopts a very competitive pricing where the aim is to eliminate all the weak competitors. The price of the product is fixed such that the weak competitors cannot price their products at or below this price.

5. What is marginal cost pricing?

Ans.The pricing was based on the total cost comprising of the fixed cost and the variable cost. But here the fixed costs are ignored and the prices are determined based on the marginal cost. The firm uses only those costs that are directly attributable to the output of a specific product.
 
6. What is cyclical pricing?

Ans. The pricing strategy which is done to capitalize on the cycles of the seasons in nature and the cycle in the economy are known as cyclical pricing. While seasonal factors operate on the short term the economic cycle operates on the long run.
 
7. What is Imitative pricing?

Ans. This is often used in retail business. In many business situations it is considered useful to imitate the price set by other firms. This approach makes demand quite easy, as the decision makes does not have to do the demand and cost analysis.
 
8. What is turnover pricing?

Ans. Turnover is the word which denotes the sales of the product. The higher the turnover is higher the sales. It is generally useful to maintain a lower markup on high turnover products because these items are purchased frequently by the customers and any increase in the price will make them to shift to the competition. E.g. FMCG Goods
 
9. What is dual pricing?

Ans. Usually the firms will produce essential commodities have part of their product under administered pricing and part of the product is sold in the free market. These products are said to have dual pricing.