Also, some amount needs to be invested in the transportation and several other avenues of expenditure. 3) Cost Management :Įach company has to invest a certain amount in the production of its items. This ways, the E-commerce portal is entertaining all types of customers. Many E-commerce sites for example entertain private label brands as well as top brands.
Thus, differential pricing is a chance for every company to reach out to customers and take just as much as the customer is willing to pay. However, not every customer is willing or has the capacity to pay the price. The ulterior aim of each company is to sell as much as possible. Same concept is applied in Airline industry. When the demand is more, the prices surge and go up so that a customer is paying more for the same ride then at a time when the demand is less. Just have a look at Uber and the concept of surge pricing. Now, what if I tell you that you have a chance to increase your revenue to the maximum with differential pricing? Thus, we can safely say that your brand value is highly dependent on your revenue. Your revenue of the company determines how much your turnover is. Your earnings will definitely increase.Īlso Read Retail Store Location: Importance, Types, & Tips to have a Good Location 2) Increase in Revenue : This is very useful for you because this means that your customer base will broaden and you will, at the same time, be able to sell more of your units. This means that people who are of different economic classes can also try out your product since the price is different for different segments.
In case of differential pricing, you can target a wider audience. If you have enough revenue generated by the company, then you can think of more and extensive marketing strategies that would reach a wider number of people. Price is one of the most important elements that decide the type of marketing strategy you are eligible to resort to. That is what we are most concerned about when we think of advantages of differential pricing. Out of the 4 P’s, one of them is pricing. It is known as the marketing mix because it includes essential elements that are the key to success for any company who to achieve excellence and also make the profit. This is the pillar on which the marketing strategy of every company rests.
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