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Price elasticity: products with high quality or being highly processed tend to be inelastic demand, while row materials are usually elastic. For example, a price increase in a car only leads to little decrease in demand, in the contrary; a price increase in oil could leads to huge change in market. Market-skimming pricing: two examples came to my mind when I saw this concept, Samsung and Apple. As I know that, Samsung often set an extremely high price when they release a new cellophane, after few months the price could drop nearly 40% or even more.
But Phone never change its price. Market-penetration pricing: this often happened when a company first enters a new market. It could help to gain more customers and set a good impression that this company’s product is worth to buy. Product-line pricing: the broad range of prices and features will attract more customers in different levels of income. For example, when buying a car, you are able to choose different accessories, such as entertainment system, safety system and lighting system.
Captive-pricing: an example for captive-pricing is desk lamp, desk lamp is cheap but the bulb is not. You can find a desk lamp in Walter for $10, while the bulb could cost you $5. By-product pricing: a farm can collect animals’ waste then use to produce marsh gas, which Is able to reduce the fixed cost in the farm. Segmented pricing: this kind of pricing are common happened in beverage and food companies. Bigger packs are cheaper than smaller packs per unit. Psychological pricing: this pricing could found In medicines.
When buying a medicine we focus on Its safety, so we could accept to buy an expensive one Instead a cheaper one. For example, when a consumer found two medicines and they are nearly the same quality, but this consumer didn’t know the quality, and then he tend to buy the expensive one, since people use price to Judge quality. Dynamic pricing: I’m not sure If this example Is right. The price of crude OLL Is changing every day. It determined by the supply-demand relationship.