Pricing strategy is the method a company uses to set the price of its products or services. It balances costs, customer perceived value, competition, and business objectives such as profit, market share, or penetration.

Common strategies include cost-plus pricing, value-based pricing, competitive pricing, price skimming, penetration pricing, and dynamic pricing. The choice of strategy affects positioning, demand, and profitability. Pricing is one of the four Ps of the marketing mix and is often the most flexible.

Common strategies

• Cost-plus: cost plus markup
• Value-based: based on perceived value
• Penetration: low price to gain share
• Skimming: high price to capture early adopters