9 Lesser-Known But Winning Pricing Strategies

When it comes to pricing your products or services in the manufacturing industry, there's more than meets the eye.

There are a variety of pricing strategies that are less popular but have proven to be effective in the industry. In this article, we'll go over 10 lesser-known but winning pricing strategies and provide some real-world examples of companies that have used them effectively.

1. Cost-plus pricing with volume discounts: This strategy involves giving volume discounts to customers who purchase large quantities of a product. A great example of this is GE, which offers volume discounts to its industrial customers who purchase large quantities of parts or equipment.

2. Segmented pricing: This approach involves setting different prices for different segments of customers based on factors such as location, industry, or buying power. The pharmaceutical industry is known for this, some companies charge different prices for their drugs depending on the country they are sold in.

3. Price skimming: This strategy involves setting a high price for a new product and then gradually lowering the price over time. A good example of this is the technology industry, where companies like Apple and Samsung often release new products at a premium price, and then gradually lower the price over time.

4. Product line pricing: This approach involves setting different prices for different products or product lines based on factors such as cost, quality, or brand. The automotive industry is known for this, luxury carmakers often charge more for their products than their mainstream counterparts.

5. Price discrimination: This approach involves charging different prices to different customers based on their willingness to pay or perceived value of the product. A good example of this is the airline industry, where companies often charge different prices for the same seat based on factors such as booking date, travel class, and frequent flyer status.

6. Price elasticity: This strategy involves adjusting prices based on how sensitive customers are to changes in price. This can be used to optimize profits and take advantage of market conditions. An example of this is the consumer goods industry, where companies adjust their prices based on seasonal demand.

7. Price anchoring: This approach involves using a high-priced reference point to make a lower-priced product appear more attractive. This can be seen in the fashion industry, where luxury brands often set a high price for a product and then offer a lower-priced version of the same product.

8. Price penetration: This strategy involves setting a low price for a new product to quickly gain market share and then gradually raising the price over time. A good example of this is the retail industry, where companies like Amazon and Wal-Mart often sell new products at a low price to quickly gain market share and then gradually increase the price over time.

9. Price laddering: This approach involves offering different versions of a product at different price points, with each version offering additional features or benefits. This can be seen in the software industry, where companies like Microsoft offer multiple versions of their products at different price points, with each version offering additional features or benefits.

Pricing strategies that are less popular but have proven to be effective are not always easy to find, but they can help you to optimize your profits and stay competitive in the market. By understanding the different pricing strategies available and the advantages and disadvantages of each, you can make informed decisions about the best approach for your business.

It's important to note that, Advanced data analysis based on data from your CPQ (configure, price, quote) system can help you to find the sweet spot for each product or service, and to stay ahead of the competition. By analyzing data on customer behavior and preferences, you can gain a deeper understanding of what value your products deliver and how to price them accordingly.

Don't be afraid to experiment with different pricing strategies and to adjust them as your business evolves. With the right approach and the right tools, you can take your manufacturing business to the next level.