Prices: Intelligent Strategies to Improve Profitability

Applying segmentation techniques, making comparisons with the prices of other products, and applying discounts to customers who have eco-friendly practices are some of the strategies that can help maximize the sales profitability.

Friday, June 7, 2019

Ariel Baños, a price management specialist and founder of, explains how simple techniques completely applicable to any business can be turned into intelligent and creative pricing strategies to maximize profitability.

The ultra-segmentation era. The application of price segmentation techniques in the sale of entry tickets helps to achieve maximum profitability and can be divided as follows:
-Segmentation by sales channel: Full price at the box office and on-line discounts.
-Segmentation by product lines: Service package options at different prices.

Smart comparisons. Prices are neither expensive nor cheap by themselves, it all depends on what our reference is. A comparison of product prices should be made, based on similar but more expensive products, to show how much the consumer can save.

Ecological prices. Taking care of the planet and behaving in an environmentally friendly way cannot just be a matter of individual will or education. A smart pricing scheme can provide the right signals for consumers to behave "eco-friendly.”

The single-price model in action. The "single-price" or " unique price" model consists of selling the whole range of products (or almost all) of a company at the same price. These are usually remarkably low prices. The objective is to trade a product at a low price and sell the complementary good to a higher one, where a good profit margin can be obtained.

Premium brands. The distinctive brands, most of which are the product of good positioning, can be sold at prices that double or triple the other goods offered in the market.

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