Various companies or brands in the same industry or sector may employ different pricing strategies to compete in the market. For Example: The mobile or tech industry or the automobile industry, Samsung and Apple employ different pricing strategies in order to gain market share. Companies may even adopt new pricing strategies for products after launch to maximize sales during various stages of the products lifecycle or various seasons of the year, like major holidays etc.

Below are some of the types of pricing strategies employed by most businesses:

• Premium Pricing – Under this strategy, businesses set prices higher than that of their competitors. Businesses with niche offerings, luxury offerings or strong competitive advantage generally adopt this strategy. However, to support this premium pricing, you will need to develop your customers perception of value thorough the way you market and communicate your offering. This could be through the marketing material, look and feel of the point of sale (Website/ store), packaging of the product, level of service etc.
• Penetration Pricing – As the name suggests, this strategy is employed by businesses that wish to penetrate the market. Usually employed by start ups and new businesses to stand out amongst existing players. Business provide their offerings at low prices. Though this may lead to an initial loss in profits, the exposure gained in the long term may help drive up profits in the future. Once, the businesses as successfully penetrated the market, they will raise the price to reflect their new position. Businesses employing this strategy make sure they can sacrifice their product margin for that time period. Companies that have secure funding of some sorts generally apply this strategy.
• Economy Pricing – Used by discount retailers and budget brands, businesses minimize marketing, production and packaging costs to keep prices down. These businesses target price conscious consumers looking for value products or services that serve their requirements. To generate profits by using this strategy you will need to have large sales volumes.
• Price Skimming – Businesses using this strategy set high prices for their offerings during the introductory phase. This is done so as to capitalize (Maximize profits) on early adopters and as competitors enter, reduce the price gradually to attract price conscious consumers.
• Price Anchoring – Price Anchoring is when a business places premium products and services near standard options with the intent to create the impression among consumers that the less expensive option is a bargain in comparison, increasing the likelihood of purchase. 
• Psychology Pricing – This pricing strategy is used to encourage consumers to respond to the price of a product on an emotional level rather than a logical one. It is used by business to create an enhanced illusion of value for the consumer. For example: when companies price their product at 0.99 fils or 1,999 AED. Consumers generally concentrate on the big denomination rather than the small denomination and feel like they are getting more value for their money. 
• Bundle Pricing – Also known as product bundling, businesses bundle two or more products and sell them at a lower rate compared to if they buy them individually. This is generally done by bundling complimentary products or lower priced products with a comparatively expensive one. Businesses should ensure that they can make up for the losses on the lower value product by making good profits on the higher valued product. This could be employed to get rid of unsold stock or increase customer’s value perception by providing freebies. 

Factors to Consider
Before adopting a pricing, strategy mentioned above, you will need to account for the following:

• Know the market – You need to understand what your target customers are willing to pay for your offering and what competitors are currently charging. You can then decide whether to match or beat them. Simply beating or matching them will also not work, you need to consider that you cover your costs before doing so. You may even charge a premium based on the uniqueness of your offering and the customers requirement for the same.
• Work out your costs – Include your direct costs (product development), variable costs (supplies and materials, packaging/ production costs) and percentage of fixed costs to be covered (rent, rates and wages) that the sale of the offering needs to cover. You can add all of these costs and divide it by the volume to arrive at a unit break-even figure.
• Consider your mark-up – Once you evaluate the price that should be set to break even, you can add a margin to the price to create profits. Industry norms, experience or market knowledge will help you decide the level of mark-up. This will can also be dependent on the pricing strategy you choose to employ. If the price is too high, try to reduce costs and decrease your profit margin accordingly. 
• Impact of external factors on price – While considering your pricing strategy you should consider external factors like VAT, Sales Taxes etc. that will be applied on the product during sale. This could depend on different markets or territories. 
• Stay update – Competitor prices and customer preferences can change over time. You need to constantly monitor the market and change your prices and if needed your pricing strategies accordingly.

For any entrepreneur, Pricing is an important decision that needs to be arrived at after considering the above factors. It not only helps position your product or service in the marketplace but also determines your financial and revenue model as also projections. Taking advice of an experienced business consultant is recommended to help you decide on your product pricing.