Pricing Strategy

A variety of pricing strategies are used to set the optimal price for a product:

An acceptable price range includes those prices that buyers are willing to pay for goods or services. A common method for estimating the acceptable price range is a Van Westendorp analysis. [1]

Demand-oriented pricing (also called value-oriented pricing) is a method of pricing in which the seller attempts to set price at the level that the intended buyers are willing to pay. [1]

Demand-backward pricing is the act of setting a price by starting with the estimated price consumers will pay and working backward with retail and wholesale margins. [1]

everyday low priceEveryday low price is a retailing policy or strategy whereby presumably low prices are set initially on items and maintained from period to period, as opposed to the occasional offering of items at special or reduced sales prices. [1]

Hi-Lo (or high-lowpricing is the opposite of everyday low pricing. Retailers and manufacturers offer a series of “deals” or “specials”— times during which prices are temporarily decreased. One purpose of temporary discounts is to realize price discrimination in the economic—not the legal—sense of the term. [3]

Odd-even pricing is a psychological ploy that suggests buyers are more sensitive to certain ending digits. Odd price refers to a price ending in an odd number (e.g., 1,3,5,7,9), or a price just under a round number (e.g., $0.89, $3.99, $44.98).

Even price refers to a price ending in a whole number or in tenths (e.g., $0.50, $5.00, $8.10, $75.00). [1]

one-price policy dictates that, at a given time, all customers pay the same price for any given item of merchandise. It is not the same as single-price policyone-price retailer operates under a one-price policy. [1]

Single-price policy refers to the offering of all goods at a single price (e.g., everything for $5, or $10, etc.). It is not to be confused with one-price policy. A single-price store is a retailer operating under a single-price policy. [1]

Prix fixe is a French term meaning “fixed price” and refers to a restaurant menu that offers a full meal at a set rate. [4]

Value pricing is a method of setting prices based upon the perceived value the product gives a specific consumer or group of consumers. [1]

Value-in-use pricing is a method of setting prices in which an attempt is made to capture a portion of what a customer would save by buying a firm’s product. [2]

A variable price policy adjusts prices to different customers depending on their relative purchasing power or bargaining ability. [1]


  1. American Marketing Association, AMA Dictionary.
  2. Universal Marketing Dictionary Project, 2023.
  3. Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc.

Comments are closed.