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The five main types of pricing strategies for a new product are:
1. Premium Pricing: This strategy involves setting the price of a product higher than the competitors. It is used when a product has a unique feature or high perceived value.
2. Price Skimming: This involves setting a high price initially and then gradually lowering the price over time. This strategy is often used for new technology products.
3. Penetration Pricing: This strategy involves setting a low initial price to attract customers and gain market share. The price is often increased once this objective is achieved.
4. Freemium Pricing: This involves offering a basic product or service for free while charging for premium features or services.
5. Promotional Pricing: This involves temporarily reducing prices to increase sales or market share. This could be in the form of discounts, coupons, or sales promotions.
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Having a great product that delivers the right value to customers is a good starting point. But then what? At what price point should you sell the product for? And how do you scale and grow the product? There are five main types of pricing strategies that can be used for a new product. Premium pricing can be used to price a product above current market value to generate more revenue, while price skimming takes a high introductory price and lowers it over time. The less price-sensitive will buy first and other customers will buy-in later at a lower price. Penetration is used to enter the market with a lower price point and then attract as many customers as possible to later raise the price. Freemium provides a free version of a product with additional features that must be paid for, either with a paid version or from ad revenue. Promotional pricing provides temporarily lowered prices via flash sales or discounted entry offers that revert back to the original pricing after a set date. (...
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How do you stay innovative and provide the right values for customers? Effective product development allows companies to sustain, grow, and thrive in ...
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