Q. No. 3. What are the various types of Pricing? Propose the Pricing Strategy for a new, high-quality brand of shoes.

Types of Pricing:

1. Cost-Plus Pricing: This method adds set percentage to the cost of making the product. It helps in figuring out the selling price.
2. Value-Based Pricing: This one sets prices based on what customers think the product is worth. It’s not just about how much it costs to make.
3. Penetration Pricing: Here, a product launches at a low price. The idea is to quickly grab a spot in the market, then slowly increase the price later on.
4. Skimming Pricing: This starts with a high price aimed at early buyers. Over time, as more competition shows up, the price drops.
5. Premium Pricing: Sometimes prices are set really high. This shows off the luxury and quality of the product, making it feel exclusive.
6. Psychological Pricing: This uses tricks like pricing something at $99.99 instead of $100. It makes it look more appealing to buyers.
7. Competition-Based Pricing: Prices are based on what other sellers charge. Companies might match prices or change them up a bit from competitors.
8. Dynamic Pricing: Here, prices change depending on demand and how much of it is available. It’s common for online shopping.
9. Bundle Pricing: This sells multiple products together at a lower price. It makes buying them seem like a great deal.
10. Geographical Pricing: Prices can change based on where you’re selling the product. Different markets mean different prices.

Proposed Pricing Strategy for a New, High-Quality Shoe Brand:

For this new shoe brand that’s all about quality, Premium Pricing fits best. It highlights how exclusive and well-made these shoes are. People often think high-quality means high prices, which can boost the brand’s image.

• Justification: High-quality shoe brands usually go for a specific group of customers who’ll pay more for better materials and comfort. Using premium pricing can make the shoes feel even fancier and help them stand apart from cheaper brands.
• Value-Based Adjustments: While setting those premium prices, it’s smart to consider Value-Based Pricing too. That means thinking about features customers care about—like better materials, being eco-friendly, or options to customize—and then adjusting prices to match that value.

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