Price Strategies for New Products

How are prices set? In the past, prices were set by buyers and sellers negotiating with each other. Sellers would ask for a higher price than they expected to receive, and buyers would offer less then they expected to pay. Through bargaining, they would arrive at an acceptable price.

The strategic importance of price demonstrates how products, distribution, price, and promotion strategies will fit together into an integrated strategy of program positioning.

Pricing is a problem when a company has to set a price for the first time.

This happens when:

Analysis of the pricing situation provides useful information for pricing new products.

Additional considerations in deciding about prices include:

Pricing approaches for new products include:

Variations within the four categories occur. The many industries, marketing managers establish prices that are followed by other companies in the industry.

The company has to consider many factors in setting its pricing policy. Here’s a quick six-step procedure for setting price pricing for new products.

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