Cost-plus PricingCosts + markup. Guarantees a margin but detached from market realities.
Dynamic PricingPricing based on data such as inventory and demand.
Bundled PricingDiscounts for multiple purchases. Particularly useful for services as if you cancel one you pay more.
FreemiumOffering a free version with available upgrades.
Free TrialA free version for a limited time.
Pay-as-you-goPaying for usage beforehand whereby you can choose the amount you want to spend e.g. a prepaid mobile phone.
Time-based PricingCharging for a unit of time such as an hour. Common for professional services and rentals.
Value-based PricingPricing based on customer’s perceived value. For example, a premium color for a vehicle that is little or no cost to you but high value to the customer whereby they may be willing to pay a considerable amount.
Penetration PricingLow prices designed to build market share.
Promotional PricingA price promotion such as a sale or coupons.
SkimmingThe practice of charging a high price when a much anticipated product is released and lowering the price over time.
Tiered PricingPricing plans for different levels of service, features or usage.
Flat-rate PricingCharging a flat rate for something that is often usage based.
Negotiated PricesNegotiating a price with each customer.
AnchorAn expensive product that acts as a symbol of your brand. May make your other products look like a value in comparison.
Variable PricingPricing based on conditions such as demand or time of day. The same as dynamic pricing.
Subscription PricingRecurring payments for an ongoing service.
Loss-leader PricesLow prices intended to attract customers.
AuctionCompetitive bidding for limited inventory.
Reverse-auctionSellers bid for the business of a customer.
Dutch AuctionAn auction that starts with a high price and reduces the price until it is accepted.
Real-time PricesPricing based on data that changes very quickly. A common way to price stocks and other investments in extremely liquid markets.
Market PricesA market where individual buyers and sellers have no influence over price such that it is set by supply and demand. For example, the market for a high volume commodity such as wheat.
Geographical PricingSetting different prices for different geographical locations. Based on factors such as local competition and price sensitivity.
Yield ManagementThe process of setting prices for inventory that expires at a point in time. For example, discounting hotel rooms at the last minute to prevent them from going to waste.
Differential PricingCharging different prices based on what you know about the customer. A common example is higher prices for corporate customers.
Complementary PricingPricing two complementary products to maximize overall profit. For example, cheap printers that require expensive cartridges.
Try-before-you-buyAllowing a customer to trial a product and return it without charge.
Premium PricingDeveloping premium versions of things for customers who are willing to pay.
Luxury PricingSustaining consistent high prices where discounts would generate demand but damage the luxury status of a brand.
Brand DilutionA high status brand that uses this status to greatly increase scale by offering cheaper versions of things thus damaging brand image.
Clearance PricingLow prices design to clear excess inventory.
Channel PricingOffering different prices for different channels. For example, cheaper prices in store than online.
Outlet PricingA retail strategy of putting stores in non-prime locations that carry excess inventory or stock with slight defects as a means to target price sensitive customers.
Loyalty PricingBetter prices for existing customers or for regular purchases. For example, an escalating discount that goes up as you purchase more each month.
New Customer PricesLower prices that are only available to new customers.
Early-bird PricesLow prices for trying a new product or service.
Referral PricingDiscounts for referring new customers.
Flash SalesSales that are over quickly as a means to create a sense of urgency.
Bulk PricingVolume based discounts.
Psychological PricingPricing that considers how prices are perceived by customers.
Traditional PricesPrices that have been in place for a long time such that they are difficult to change.
Sticky PricesPrices that customers are accustomed to such that they may resist change.
Price PointsPrice levels where demand suddenly drops if they are exceeded. For example, customers may demand 1,000 widgets at $99 but will only demand 13 widgets at $100.
Competitive PricingPricing based on the prices of the competition and the relative strengths of your offerings.
Package PricingPricing that requires customers to chose packages of multiple things such as a set menu at a restaurant.
À La CarteAllowing customers to purchase individual things.
Price LeadershipSetting the lowest price to capture high volumes of sales at relatively low margin.
Everyday Low PriceSetting reasonably low prices that are stable and predictable. Together with stable stock levels and convenient locations, this can generate high levels of customer loyalty.
High-low PricingCharging a high price for new releases that decreases over time. Common in the fashion industry where clothes for a new season are initially fully price with discounts towards the middle of the season.
Seasonal PricingPrices based on seasons such as a hotel near a ski hill that is relatively inexpensive in summer.
Predatory PricesPrices designed to put the competition out of business. An anti-competitive practice.
Price GougingIncreasing prices in response to an emergency or shortage. An unethical practice.
Price UmbrellaA price set by a dominant competitor that acts like gravity on all other prices.
Price DifferentiationFinding ways to charge customers based on their willingness to pay. For example, coupons that are more likely to be used by price sensitive customers.