In today's highly competitive market, businesses need to have a pricing strategy that will make them stand out from the competition. One of the most effective pricing strategies is the market oriented pricing strategy. This strategy takes into account the customer's perception of value and the competition's pricing to create a pricing strategy that is attractive to the customer and profitable for the business. In this article, we will explore what market oriented pricing strategy is, its benefits, factors to consider, methods, and examples.
What is Market Oriented Pricing Strategy?
Market oriented pricing strategy is a pricing approach that takes into consideration the customer's perception of value and the competition's pricing. This pricing strategy is based on the principle that the price of a product or service should reflect its value to the customer. Market oriented pricing strategy involves conducting market research to understand the customer's needs and preferences, the competitive landscape, and the price elasticity of the product or service.
Benefits of Market Oriented Pricing Strategy
One of the main benefits of market oriented pricing strategy is that it helps businesses to remain competitive. By understanding the customer's needs and preferences, businesses can create a pricing strategy that is attractive to the customer and meets their expectations. Additionally, market oriented pricing strategy helps businesses to increase revenue and profitability by charging a price that reflects the value of the product or service.
Factors to Consider in Market Oriented Pricing Strategy
When implementing a market oriented pricing strategy, businesses need to consider several factors. These factors include the customer's perception of value, the competition's pricing, the cost of production, and the price elasticity of the product or service. Additionally, businesses need to consider the impact of the pricing strategy on their brand image and reputation in the market.
Methods of Market Oriented Pricing Strategy
There are several methods that businesses can use to implement a market oriented pricing strategy. These methods include cost-plus pricing, value-based pricing, and dynamic pricing. Cost-plus pricing involves adding a markup to the cost of production to arrive at the final price. Value-based pricing involves setting the price based on the perceived value of the product or service to the customer. Dynamic pricing involves adjusting the price based on market demand and supply.
Examples of Market Oriented Pricing Strategy
One example of market oriented pricing strategy is Apple's pricing of its iPhone products. Apple understands the customer's perception of value and the competition's pricing, and sets its iPhone prices accordingly. Another example is Amazon's dynamic pricing strategy, where the price of a product changes based on market demand and supply.
Conclusion
Market oriented pricing strategy is an effective pricing approach that helps businesses to remain competitive, increase revenue, and profitability. By taking into consideration the customer's perception of value and the competition's pricing, businesses can create a pricing strategy that is attractive to the customer and meets their expectations. Additionally, businesses need to consider several factors when implementing a market oriented pricing strategy, such as the cost of production, price elasticity, and impact on brand image and reputation. Overall, market oriented pricing strategy is a valuable tool for businesses in today's highly competitive market. LSI Keywords: Competitive market, customer perception, cost of production, price elasticity, brand image NLP Keywords: Market oriented pricing strategy, customer's perception of value, competitive landscape, price elasticity, cost-plus pricing