Price Adjustment Strategies enable businesses to adjust their prices in response to shifts in consumer demand and the competitive landscape.
These include Discounts, where prices are reduced to incentivize early payments or bulk buying to boost short-term sales and reward loyal customers.
The trade-in allowance offers reductions for returning old items when buying new ones, leading to sales growth and customer retention.
Another strategy is Segmented pricing, where different prices are set for the same offering based on customer segments, product forms, location, and time to maximize revenue.
For example, museums charge different fees for different age groups, and airlines charge higher for business class to capture the maximum price a customer is willing to pay.
Meanwhile, in psychological pricing, prices are set slightly below round figures or based on reference pricing, which compares the sale price to a higher "original" price. It makes products seem cheaper.
Last is Promotional Pricing, which involves temporary price offers like rebates, low-interest financing, and limited-time deals to create a sense of urgency and stimulate short-term sales.
