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Mkt501 Strategic Marketing

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MKT501 STRATEGIC MARKETING MODULE 5 SLP
PRICING STRATEGY

PRICING STRATEGIES AND TACTICS Pricing strategies can vary throughout the marketplace and the different companies. Pricing is an important strategic issue because it is related to product positioning. Pricing also affects other marketing mix elements as well, such as product features, channel decisions, and promotion. A pricing strategy is a course of action designed to achieve pricing objectives. This strategy helps marketers set prices (Pride, Hughes, & Kapoor, 2006). The types of pricing strategies and the tactics that Lowe’s uses are “at-the-market”. Different types of pricing strategies are skimming, penetration pricing, everyday low pricing, and cost-plus pricing to name a few. The many different ways that Lowe’s keeps itself competitive in the marketplace is by combining the some of the different types of strategies for their various products. When a new product comes out that the public has been waiting for they could use the skimming strategy. This means that Lowe’s might set a higher price initially in order to target the consumers that want it right away and are willing to pay a higher amount without waiting for pricing to level out. One example might be a new type of refrigerator that has come out and been advertised and is very energy efficient and has modern features to appeal to the consumer. Another method that is more commonly used is penetration pricing. This type of strategy is used to offer a low initial price on a product. Lowe’s has many different types of home improvement products therefore if it can get the consumer to come in for a “sale” item, they will become comfortable shopping with Lowe’s and hopefully see many other items that they can purchase. This type of strategy can get a consumers attention and will usually create future customers for the business if the

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