price differentiation strategy

many expected the 5c to be a major departure for the company in terms of design and pricing, but those hoping apple would introduce an entry-level iphone model with an affordable price tag were sadly disappointed. whether or not the 5c is a feeble attempt to capture a piece of the market downriver, introducing a cheaper, stripped-down version of a product can actually be a great strategy. price your entry-level product or service too high though, and you risk pushing away potential customers who would happily pay a nominal amount for your product (even if it includes less features or decreased functionality).

rather than simply dismissing an entire segment of customers as “too cheap,” offering a less expensive version of your product gives you the opportunity to persuade these customers to upgrade to premium plans (or more expensive products) in the future. the cries of “brand dilution” and “cheapening your brand” will be inevitable whenever you consider offering a slightly lower quality, less expensive version of an existing product. every aspect of your pricing strategy is a process, and experimenting with product differentiation and analyzing the results can be an effective, ongoing component of that process. simply put, there’s too much cash left on the table if you ignore a whole segment of consumers who might be interested in a basic version of your product with a reduced price.

a differential pricing strategy allows the company to adjust pricing based on various situations or circumstances. the price variations come in different forms, from discounts for a particular group of people to coupons or rebates for a purchase. the differential pricing strategy means certain customers pay less for the same product than others pay. the discounted prices may come in the form of a temporary discount or a permanent lower price for a particular group of people. in other situations, the price may start high for everyone and gradually lower the longer the product is on the market. an example is a senior or student discount on admission to a museum or entertainment facility. this option is typically well-received by others who don’t qualify because the targeted groups are generally thought of as lower income and deserving of the discount.

for example, your base price may apply for the purchase of one to five units, while a 10 percent discount applies for six or more units. another example of differential pricing is allowing anyone to receive the discount if they are willing to seek out a coupon, fill out a rebate form or wait for a sale. the lower price makes your business more attractive to the groups you target. in cases when strategies like coupons, sales or rebates are used, the initial discount gives the new customers a chance to try the product. for a permanent lower price such as a senior discount or lower student rate, this means continued lower profits over time. in the case of a physical product being purchased, someone who qualifies for a significantly discounted price could turn around and sell it to someone else for a higher price. this allows the consumer to profit from your product without your company receiving any of the money. she holds a bachelor of arts in elementary education with a reading endorsement.

critical examinations of the most recent iterations of the iphone as well as apple’s pricing strategy have a differential pricing strategy allows the company to adjust pricing based on various situations or circumstances. the price pricing plays a key role in developing and formulating a market strategy. the use of pd curves in developing products and, . price differentiation is a pricing strategy that charges different segments of customers altered prices for the same products or services.

differential pricing is the strategy of selling the same product to different customers at different prices. consider the differentiation strategy purification (decrease in price; decrease in perceived value) – examples: easyjet, tata, logan etc product differentiation and price discrimination are both terms used in marketing and economics, but there are differences between the two strategies.,

When you search for the price differentiation strategy, you may look for related areas such as . what are the 5 pricing strategies? what is differentiation strategy example? what are the 4 types of pricing strategies? what is low cost & differentiation strategy?