Pricing Strategy in Marketing


Marketing can be viewed as a set of functions that include product development, packaging, pricing, advertising, selling, distribution and customer service. All of these functions are studied under the term “marketing mix” – consisting of the 4 Ps; – product, pricing, promotion and place. Pricing is a vital strategic arm of marketing. By adopting a suitable pricing strategy, it is possible to achieve greater profits in the long term or short term as the case may be.

Pricing is naturally dependent on some factors such as the cost of production, local taxes and showroom costs, advertising costs and cost of the channels of distribution involved before it reaches the consumer. But pricing can also be a strategy and it can be manipulated beyond a certain level to provide maximum benefit to the marketer. There are many kinds of pricing strategies such as: premium value, high value, super value; overcharging, medium value, good value; rip-off, false economy, economy.

Premium Value Strategy

Prestige Strategy or Premium Value strategy is the strategy of consistently pricing at, or near, the high end of the possible price range to help attract status-conscious consumers. An example of a company that partakes in premium pricing is the US based Harley Davidson automobile company whose bikes may be purchased online at The company adopts a premium pricing strategy because they target the status conscious customers who believe that high price is a sign of self worth and also an indication of good quality;

Economy Strategy

This is a strategy of setting price at the lowest possible rate. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc. is an example of an economy pricing strategy. The company follows this pricing strategy to meet competition and through this economy strategy is has become the world’s leading retailer.

Rip-off Strategy or False Economy Strategy

Rip off pricing or false economy pricing refers to the strategy of overpricing a product in relation to its value. This is likely to be a very unpopular method of pricing and customers are likely to complain or spread bad word of mouth about the company. This is not a strategy followed by professional marketers. An example of such overpriced products may be found at The product is overpriced and customers are encouraged to make profit not just by selling these products but by networking and creating multiple levels. The company uses this pricing strategy as Amway distributors are encouraged to use the products themselves without selling. Moreover this strategy ensures that distributors do not stick to selling but rather go about networking to make profits.

Is online advertising a boon or a bust? Select and report on a company that provides online marketing services and comment as follows:

Yes, online advertising is a boon.

The company chosen is DoubleClick at The company is one of the largest online advertising firms, and specialized in targeted advertising. DoubleClick provides services to web publishers, marketers and advertising agencies.

One of its products is DART Motif for marketers. Created by integrating Macromedia Flash MX 2004 with DART ad management solutions, DART Motif is a rich media solution that helps users to simplify and save time at every step of the rich media process. DART Motif is used by ad agencies and marketers and accepted by a growing list of publishers, including both AOL and MSN, which have each certified DART Motif for their advertisers’ rich media campaigns. A unique aspect of the DART Motif solution is its exclusive measurement package, Audience Interaction Metrics.

This reporting system can gather more than 30 unique user interactions including ad exposure time, ad interaction time, whether a rich media ad fully delivered, multiple clicks, load movies, and custom-timed events. Customers using DART Motif include Beyond Interactive, FOX’s American, I-Level, ING DIRECT Canada, Moxie Interactive, Nurun/Ant Farm Interactive, Saatchi & Saatchi LA and Zenith Media, GSD&M, Starcom and Carat Digital UK, which recently executed a series of successful campaigns for Renault Laguna, Renault L&K, Renault Modus and Renault Megane with DART Motif.

Most recent research findings/trends about the same/similar products/services posted on the website According to a research report by Rick E. Bruner and Jai Singh, video is the hottest format for online advertising. DoubleClick’s acquisition of Klipmart last year places it in a position of competitive advantage in this new market (Bruner and Singh, 2007).


Bruner, E. Rick and Singh, Jai (2007). Video Ad Benchmarks: Average Campaign Performance Metrics. A DoubleClick Rich Media and Video Report. Web.

DoubleClick (2007). About DoubleClick Rich Media and Video. Web.