Willingness to Pay Willingness to Purchase is the main factor that represents customers demand for a product or service. It varies by customer and is impacted by different attributes such as brand, price elasticity, quality of product and promotion. By understanding customers willingness to purchase, companies can improve their pricing strategy to optimize revenue. The Customer […]
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Pricing Strategy Strategy Discription Example Price Levels Setting different prices for varying service levels / product qualities. Air plane tickets: 1st Class vs. Business Class vs Economy Class Price Discrimination Setting varying prices for same service/product value a) Across Customer Segments a) Different locations (East vs West) or different age groups (young vs old) b)
Product Life Cycle The Product Life Cycle (PLC) illustrates the future demand for the product. Its shape is determined by the probability of trial and adoptions of a new product. Possible Product Life Cycle scenarios Classic Traditional penetration progression with increasing penetration during introduction, growth, maturity and plateau phases Fashion Varying penetration over time due
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