Page 38 - IMDR MSME BOOK 2021

Managing Finance in Micro, Small & Medium Enterprises
The commonly used pricing policies to achieve the
desired sales and prot are given as follows:

Figure No. 8 – Pricing Policies

Premium
Pricing
Price Pentration
Discrimination
Pricing
Pricing
Policies
Psychological Skmming
Pricing Pricing
Bundle
Pricing
1) Premium pricing
It is a type of pricing which involves establishing a price
higher than the competitors to achieve a premium
positioning. The rm can use this type of pricing policy
when the product or service offered by it have some
unique features or core advantages, or when the rm
has a unique competitive advantage compared to the
competitors.
2) Penetration pricing

This pricing policy is designed to capture market share
by entering the market with a low price as compared to
the competitors. It can be used to attract more customers
and to make the customer switch from current brands
existing in the market. The rm can target price sensitive
customers and once a market share is captured, the
prices are increased by the rm.

3) Skimming price
Skimming pricing is a type of pricing policy used by rms
that have a signicant competitive advantage and can
gain maximum revenue advantage before the other
competitors begin to offer similar products. After having