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In businesses are well known that there are six pricing strategies applied. A business might use all pricing strategies by considering usefulness of each pricing strategies. Let us discuss them one by one.

Cost-plus pricing
Price of product is determined by calculating cost of production each item and added with percentage of profit expected. Example: cost of production for making 100 chocolate bars is $100. Producer expects to get 10%. Calculating the selling price each chocolate bar! By using formula “cost of production divided by total production times 10%” will be get selling price of the product is $1.1.

Penetration pricing
Penetration pricing is used when the new product tries to enter market. The price is set lower than competitors’ price. Example: existing products are sold at average price of $10-$12. By using penetration pricing, new product is sold at $8. The lower price wishes attracting consumers’ attention to buy this product.

Price skimming
Opposite of penetration pricing, producer is charging higher price than competitors’ brands due to novelty factor. This product is new invention in the certain industry. Example: iPad’s Apple is new invention in gadget industry. Cost of this product is only $10 but the selling price is $400. There are no competitors for this product at the time.

Competitive pricing
Price of product is set in line or just lower than existing products. Example: the new product by using penetration pricing could use “competitive pricing” after has certain market share that has been expected. Product by using price skimming will being consider to lower its price due to there are many new competitors are entering market. To maintain exists consumers that already loyal.

Promotional pricing
Price of the product is set lower than competitors’ price for short time. Example: to sell unsold product, producers use this pricing strategy to get rid stock. Producer gives 50% discount for two days only or by giving promotion “buy two, get one free”.

Psychological pricing
Producer is charging unique price to make consumer attracted. The price can be higher or lower than competitors’ price. Higher price will reflect as a status symbol for high income consumer. Lower price in daily product will reflect value-money for consumers. Producer can also use $99 than $100 to charge product price.