The reason pricing and customer base are important in business is that without the correct pricing strategy, you won’t have a business or, at least, for long. This is why knowing who you are marketing to is important.
Different Successful Pricing Strategies and Examples
- A higher cost that goes with better quality- This strategy can work within the limits of what a particular customer is willing to pay. A great example of this is the Banana Republic. When the original founders were first starting their business of selling items with a safari theme, they found when they increased the cost of a particular make of shirts sales actually took off.
- Great quality products sold at a lower cost in order to reach a broader customer base- A great example of this is Martha Stewart and her items when they were sold in the K-Mart stores at a lower cost. Because she appealed to a very broad base of customers, she was able to run a profit by selling high-quality items in what many see as a store that sells discounted products.
- Lowest cost, convenience, and the “hidden treasure fevor”- A great example of this is Dollar Tree. This is a store where everything is actually a dollar. You can actually find many nicely made items here and you can’t beat the price even online because of shipping costs.
- Higher prices and convenience- This is where the term “convenience store” comes from. Sheetz is a great example of this. This convenience store is found off of many major travel routes and has gas pumps, restroom facilities, food to eat, and other products that someone may need immediately if they are traveling.