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) Across Products
b) Good, better, best (Hard Cover vs Lose Leaf vs ebook)
c) Across Time – Long Term
Penetration: Low price to get consumers. Works only in big markets with existing competition and deep pockets.
Skimming: High price for early birds. Works only if new product introduction is frequent and regular.
d) Across Time – Short Term
EDLP: Every Day Low Price.
Hi/Lo: Prices are set high but periodically discounted.
Price Communication
Integrated / Segregated Pricing
Bundle with shipping cost, airfare, hotel, incl. tip,…
Price Structure
Fixed vs Variable
Is it negotiable?
Single vs Bundle
Standalone or any added value to the product?