{"id":2318,"date":"2017-04-19T13:27:35","date_gmt":"2017-04-19T07:57:35","guid":{"rendered":"http:\/\/www.intelligencenode.com\/blog\/?p=2318"},"modified":"2026-04-27T14:21:04","modified_gmt":"2026-04-27T08:51:04","slug":"asked-teachers-pricing-policies-marketing","status":"publish","type":"post","link":"https:\/\/www.intelligencenode.com\/blog\/asked-teachers-pricing-policies-marketing\/","title":{"rendered":"What You Should Have Asked Your Teachers About Pricing Policies In Marketing"},"content":{"rendered":"\n<p><span style=\"font-weight: 400;\">Pricing is considered one of the four basic elements of the<\/span> <a href=\"\/blog\/how-to-define-the-right-marketing-mix-for-your-retail-store\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">marketing mix<\/span><\/a><span style=\"font-weight: 400;\">, together with product, place, and promotion. It is probably the least attractive element of the four in terms of marketing. The bulk of the marketing efforts goes to product and promotion before turning to pricing. However, the price is a rather flexible element of the mix and this post will show how.<\/span><\/p>\n\n\n\n<!--more-->\n\n\n\n<p><span style=\"font-weight: 400;\">We have already established that pricing policy is<\/span> <a href=\"\/blog\/pricing-policy-affects-sales\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">very important<\/span><\/a><span style=\"font-weight: 400;\"> for a business that aims to gain success by finding the somewhat mythical <a href=\"https:\/\/www.intelligencenode.com\/blog\/define-price-point-push-competitors\/\">price point<\/a> where sales and profits enjoy maximum levels. A business might employ a variety of pricing policies and strategies, depending on its vision of marketing objectives and goals. It often seems like marketers have a nasty habit of underestimating the strategic importance of pricing. Those are probably the ones who missed the point (or a whole class) about pricing so they don\u2019t perform revenue potential optimization. No worries, we are here to remedy that oversight. Here are some of the question you should have asked your teacher:<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-what-pricing-policy-is-best-for-marketing\"><b>1. What pricing policy is best for marketing?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">There is a no clear cut answer here as every business is unique. A pricing policy is set to reflect a part of a larger business strategy, accounting the principal market indicators like customer demand, supply, the profitability of products and so on. Pricing policy serves as a beacon for setting prices your customers can afford, not marketing it to them as something set in stone from the get-go.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-what-about-my-product\"><b>2. What about my product?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Setting an adequate pricing policy requires serious market research and evaluation. Also, it must go in line with your overall business strategy and reflect the supply and demand relationship. Having a too low or too high price can hurt your business and your product equally. Here\u2019s how:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\">If you set <a href=\"https:\/\/www.intelligencenode.com\/blog\/3-ways-a-pricing-optimization-platform-enables-accurate-pricing-strategy\/\">a price<\/a> too low, potential customers might perceive it as an inferior quality, cheap product. This is fine if you are aiming to cover your costs and get a minimal profit margin. In that case, a cost-based pricing policy can do the trick as it will cover all production and delivery costs while attaining a certain level of profit. However, you lose any perceived value with your customers and potentially lose money in the long run.<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">If you set your prices too high, you might give off a feel of a high-end, prestige brand. This is a risky ploy as it should be guided by a demand-based policy, meaning there is a demand for your product at the price you are selling. Utilizing this pricing policy requires a comprehensive market research, best provided by intelligence tools with real-time insights. Otherwise, your product will be labeled as expensive and won\u2019t sell.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">The middle ground here is to evaluate the unique aspects of your offering and the consumer\u2019s bond with it. That way, you are creating a perceived value for your customers and increasing their satisfaction. Once more, a company opting for <a href=\"https:\/\/www.intelligencenode.com\/blog\/all-about-value-based-pricing-strategy\/\">value-based pricing<\/a> needs to perform an extensive market research (really, it\u2019s an essential part of<\/span><span style=\"font-weight: 400;\"> modern business undertaking<\/span><span style=\"font-weight: 400;\">) to underline the value of your offering and thus motivate your customers to pay what you want as you\u2019ve modeled your goods on what they want. An example would be car dealers who charge different customers and in a different situation.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Alternatively, you can opt for competition-based pricing whereas you assess your own goods, compare it your competition and then price it lower, higher or equal. It\u2019s quick and relatively easy to implement with less market research, but it\u2019s not quite accurate in terms of demand and your value.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-is-there-more-than-one-market-segment\"><b>3. Is there more than one market segment?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Of course and it\u2019d be foolish not to use it to your advantage. Determining both primary and secondary market segments allows you to better understand how customers perceive your product\u2019s value. Not every customer is the same and will not pay the same. Market segments are important for your company\u2019s positioning and merchandising your goods to provide maximum sales at the established price points. Once again, this is where research about demand kicks in as you can fully use it to uncover where your potential customers are ready to pay more than usual.<\/span><\/p>\n\n\n\n<!--HubSpot Call-to-Action Code --><span class=\"hs-cta-wrapper\" id=\"hs-cta-wrapper-eb086aed-933d-4459-97f6-3c4ccdeeeda1\"><span class=\"hs-cta-node hs-cta-eb086aed-933d-4459-97f6-3c4ccdeeeda1\" id=\"hs-cta-eb086aed-933d-4459-97f6-3c4ccdeeeda1\"><!--[if lte IE 8]><div id=\"hs-cta-ie-element\"><\/div><![endif]--><a href=\"https:\/\/cta-redirect.hubspot.com\/cta\/redirect\/857779\/eb086aed-933d-4459-97f6-3c4ccdeeeda1\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"hs-cta-img\" id=\"hs-cta-img-eb086aed-933d-4459-97f6-3c4ccdeeeda1\" style=\"border-width:0px;\" src=\"https:\/\/no-cache.hubspot.com\/cta\/default\/857779\/eb086aed-933d-4459-97f6-3c4ccdeeeda1.png\"  alt=\"Pricing Strategy\"\/><\/a><\/span><script charset=\"utf-8\" src=\"https:\/\/js.hscta.net\/cta\/current.js\"><\/script><script type=\"text\/javascript\"> hbspt.cta.load(857779, 'eb086aed-933d-4459-97f6-3c4ccdeeeda1', {\"useNewLoader\":\"true\",\"region\":\"na1\"}); <\/script><\/span><!-- end HubSpot Call-to-Action Code -->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-why-does-the-pricing-of-my-competition-matter\"><b>4. Why does the pricing of my competition matter?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">It\u2019s perfectly fine that you want to be your own self, irrelevant of others. Nevertheless, what your competition charges matters in multiple ways:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\">You can base your whole pricing policy on the competition;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">It affects your customers as the competition might define your price range;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">It opens new opportunities for you.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400;\">Let&#8217;s say you are entering a market with a new product or a new market in general. One of the ways to price your product is to employ <a href=\"https:\/\/www.intelligencenode.com\/blog\/5-best-penetration-pricing-examples\/\">penetration pricing<\/a>. This allows you to present prices with a steep discount, maybe even with a loss, all in hope to create brand loyalty and increase the willingness of your customers to spend more in the future. But how do you know if you can compete, you are not losing money right from the start by lowering prices too much?<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">It is tempting to price higher than your competition and certainly justified if there is a demand for it or if your product or brand is perceived significantly better. However, it a tough feat to accomplish. Let\u2019s not forget that Apple spent almost all of the<\/span> <a href=\"http:\/\/www.cultofmac.com\/165670\/steve-jobs-watching-apple-fail-in-the-90s-was-like-being-the-mother-of-a-serial-killer-video\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">90\u2019s decade<\/span><\/a><span style=\"font-weight: 400;\"> soul searching before it established itself as one of the tech leaders it is today, delivering high prices on quality-perceived products.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">You can also price on parity if your offering product has better features or price lower if it has almost the same features to competing products. The key to competitive pricing is attaining insight from this detailed analyses that show how customers perceive and interact with your product so you can understand how they relate to it. This also includes analyzing thousands of competing products and how your competition reacts to you in order to package and promote your goods based on effective pricing.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\"><b>Conclusion<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">As seen, pricing is an equally important part of the marketing mix as the rest of the elements. It can be rather tricky, but whatever you do in your marketing efforts, make sure you base your decisions on knowledgeable insights. It\u2019s critical to know and monitor the market and your competition (especially their pricing) at all times in order to reassess pricing if necessary and stay ahead. There are tools that can help you optimize your prices. Market fluctuations and new products have the power to influence and change consumer demands and needs. Be the one that influences them.<\/span><\/p>\n\n\n\n<p>If you found this useful and you&#8217;d like to learn how to take your <a href=\"https:\/\/www.intelligencenode.com\/blog\/its-all-about-the-pricing-strategies\/\">pricing strategy<\/a> to the next level, we invite you to download our free <a href=\"https:\/\/info.intelligencenode.com\/20-secrets-ebook\">20 secrets to designing the best pricing strategy eBook<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Pricing is considered one of the four basic elements of the marketing mix, together with product, place, and promotion. It is probably the least attractive element of the four in&#8230;<\/p>\n","protected":false},"author":2,"featured_media":2358,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[41],"tags":[884,569],"class_list":["post-2318","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pricing-strategy","tag-pricing-policies","tag-pricing-strategy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.5 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Marketing Pricing Policies Questions You Missed<\/title>\n<meta name=\"description\" content=\"It often seems like marketers have a nasty habit to underestimate the strategic importance of pricing policies in marketing\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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