11 Pricing Strategies the Best Companies Use
and Print Profits - Part 2
Leading companies worldwide such as Apple, Amazon, and Walmart, implement these well-researched pricing strategies to maximize their profits.
Dynamic Pricing:
Dynamic pricing is a strategy aimed at optimizing profit by aligning supply and demand based on inventory or time availability. Industries such as concert venues, airlines, and hotels employ this tactic to ensure the full utilization of their inventory and maximize the value of sought-after tickets or rooms.
High-Low Pricing: This approach involves initially setting a high price and subsequently reducing it during a sale or discount period.
The intention is to create a sense of urgency, emphasizing that the exceptional price offered is temporary. The visibility of the initial high price is maintained to uphold perceived value and encourage consumers to seize the opportunity.
Appeal to Ethics: Recognizing that consumers, particularly Millennials and Gen Z, consider more than just price when making purchases, companies are increasingly aligning with shared values. For instance, Amazon highlights certain products as "climate pledge friendly," that shifts the focus from price to other factors like ethical considerations in the decision-making process. This makes 2 products ‘non-comparable’ in terms of price, and thus removes the price anchoring.
Product Bundling: Rather than selling individual items at varying prices, bundling multiple products into a single offer has proven to be a more effective strategy. Typically, bundled items complement each other and offer cost savings. The convenience and perceived value of bundled products contribute to increased sales.
Buy Now, Pay Later: Buy Now, Pay Later (BNPL) is a short-term financing option that enables customers to make immediate purchases while paying in instalments. This approach reduces the immediate financial burden for customers at the time of checkout, making the purchase more palatable. Projections indicate that by 2025, the BNPL industry will reach a substantial $680 billion.
