What are the different types of pricing strategies?

Common pricing strategies include:

• Cost-plus pricing: orices are set by adding a fixed margin on top of production or procurement costs. Simple to manage, but often disconnected from market conditions and customer value.
• Competitor-based pricing: prices are defined based on competitor price levels to stay competitive in the market. Effective in highly transparent markets, but risky for long-term profitability if used alone.
• Value-based pricing: prices reflect the perceived value of a product or service for the customer. This strategy maximizes margin by aligning pricing with customer behavior and willingness to pay.
• Segmented pricing: different prices are applied to different customer segments based on volume, geography, or buying behavior. Common in B2B and key to advanced pricing strategies.
• Channel-based pricing: prices vary by sales channels (physical stores, ecommerce, marketplaces) to reflect channel costs, competitive intensity, and customer expectations.
• Dynamic pricing: prices are adjusted frequently using real-time data such as demand, inventory, and market changes. Often powered by pricing optimization software and ai-powered algorithms like Flowlity’s to balance growth and profitability.

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