Shifted Market Pricing Strategy – Working Process, Benefits [Explained!]
If you’ve ever heard of “value-based pricing” or “dynamic pricing,” you might think you know what you’re getting into. But, what is a shifted market pricing strategy? Shifted market pricing strategy is a popular pricing technique that can be used to increase sales and profits.
In this blog post, we’ll discuss shifted market pricing strategy in detail, including how to determine whether or not to use this pricing strategy, the benefits and drawbacks of of the same and more.
What Is Shifted Market Pricing Strategy?
Well, it’s kind of like when you’re playing hide-and-seek, and you think you’ve found the perfect hiding spot, but then your little brother comes along and shifts the rules. Suddenly, the game isn’t about hiding anymore, it’s about finding the best spot to stand so you can tag everyone who comes by.
In the same way, Shifted Market Pricing Strategy is all about changing the rules of the pricing game.
A shifted market pricing strategy is a type of marketing strategy that is used to adjust the prices of products or services in order to better compete in the marketplace.
This type of pricing strategy can be used when a company is facing new competition, or when the market itself has changed in some way.
In order to shift prices, companies will often conduct market research in order to gather data on customer behavior and current market conditions.
With this information, they can then make informed decisions about how to adjust their prices in order to attract more customers and boost sales.
In some cases, a shifted market pricing strategy can also be used as a way to respond to changes in the economy, such as inflation.
By carefully monitoring market trends and customer behavior, companies can use shifted market pricing strategies to stay one step ahead of their competitors.
How Does A Shifted Market Pricing Strategy Work?
A market pricing strategy is an approach to setting the price of a product or service based on the prevailing prices for similar offerings in the marketplace.
Companies will often use a market-based pricing strategy when they are first entering a new market, as it can help them to quickly establish a foothold in the market and gain market share.
There are several different approaches that companies can take when using a market-based pricing strategy, but one of the most common is known as “shifting.”
This involves adjusting the price of a product or service up or down based on changes in the prices of similar products or services in the market.
For example, if the price of a competitor’s product goes up, a company using a shifting pricing strategy may choose to lower its own price in order to remain competitive.
While shifting can be an effective way to quickly respond to changes in the marketplace, it can also be somewhat risky, as it can lead to unpredictable fluctuations in prices.
As such, it is important for companies to carefully consider their overall pricing strategy before implementing any shifts.
How to determine whether or not to use a shifted market pricing strategy?
There are a few key factors to consider when deciding whether or not to use a shifted market pricing strategy.
First, you need to have a clear understanding of your target market and what their willingness to pay is for your product or service.
You also need to consider the pricing of your competitors and make sure that your prices are in line with what the market will bear.
Finally, you need to be prepared to adjust your prices on a regular basis in order to stay competitive.
By taking these factors into consideration, you can make an informed decision about whether or not to use a shifted market pricing strategy.
Benefits Of Using A Shifted Market Pricing Strategy
A shifted market pricing strategy is a marketing technique in which a company charges a higher price for its products or services in markets where customers are willing and able to pay more, and a lower price in markets where customers are price-sensitive.
There are several benefits to using this type of pricing strategy.
1. It can help to maximize profits by charging different prices in different markets.
2. It can help to increase market share by pricing products or services competitively in price-sensitive markets.
3. It can help to build brand equity by charging a premium price in markets where customers perceive the quality of the product or service to be high.
When used correctly, a this strategy can be an effective tool for companies looking to optimize their profits and grow their business.
Drawbacks Of Using A Shifted Market Pricing Strategy
Shifted market pricing is a popular pricing strategy in which companies set their prices based on the prices of their competitors.
While this strategy can help companies to stay competitive, there are also several drawbacks that should be considered.
1. Relying on competitor pricing information can lead to a race to the bottom, with companies competing to offer the lowest prices rather than focusing on quality or value.
2. This approach can also lead to price wars, which can damage relationships between companies and erode profits.
3. Constantly changing prices can be confusing for customers and make it difficult for them to comparison shop.
As a result, while shifted market pricing can be effective in some cases, it is important to weigh the potential drawbacks before making a decision.
How To Implement This Pricing Strategy
The key is to find the right balance between what the customer is willing to pay and your own profit margins.
To start, you will need to research your competitors and find out what they are charging for similar products or services.
You should also look at trends in the industry to see if there are any shifts that you can take advantage of. Once you have a good understanding of the market, you can start to adjust your prices accordingly.
You should always keep an eye on your competitors and be willing to adjust your prices as needed.
With a little bit of research and strategic thinking, you can successfully implement this market pricing strategy.
What Are Some Common Mistakes People Make When Using A Shifted Market Pricing Strategy?
There are a few common mistakes that companies make when using a shifted market pricing strategy.
Perhaps the most common mistake is setting the shift too large. If the price increase is too high, consumers will be price sensitive and may switch to a cheaper competitor.
Another mistake is failing to properly communicated the price increase to consumers. If customers are surprised by a sudden price hike, they may again be turned off and may switch to a different company.
Finally, some companies make the mistake of not monitoring the results of their price shift.
It is important to track sales and customer satisfaction levels to ensure that the overall goal of increasing profits is being met.
By avoiding these common pitfalls, companies can successfully implement a shifted market strategy.
Examples of Shifted Market Pricing Strategy
Let’s take a look at a few examples of this Pricing Strategy in action:
Uber Surge Pricing
Uber is a classic example of Shifted Market Pricing Strategy. During periods of high demand, such as rush hour or a major event, Uber will implement surge pricing to encourage more drivers to hit the road.
This benefits both drivers and riders, as it ensures a steady supply of drivers and helps riders get to their destination faster.
Airline Pricing
If you’ve ever booked a flight, you know that airline pricing can be all over the map. Airlines use Shifted Market Pricing Strategy to adjust their prices based on a wide range of factors, from how far in advance you book to what day of the week you’re traveling.
Amazon Lightning Deals
Amazon is a master of Shifted Pricing Strategy, with its Lightning Deals that offer steep discounts on specific items for a limited time. By creating a sense of urgency and scarcity, Amazon is able to drive up demand for these items and clear out inventory quickly.
Holiday Sales
Another example of Shifted Market Pricing Strategy is the holiday sale. Retailers will often offer deep discounts on products during specific holidays, such as Black Friday or Cyber Monday. By tapping into the excitement and hype around these events, retailers are able to drive up sales and attract new customers.
Dynamic Pricing at Theme Parks
Finally, theme parks use this Pricing Strategy by implementing dynamic pricing, where ticket prices vary depending on the day of the week, time of year, and other factors. This allows theme parks to charge more during peak times, while still attracting visitors during slower periods.
Concluding Things!!
Shifted market pricing strategy is a popular way for companies to set their prices based on the prices of their competitors.
This strategy can help companies to stay competitive, there are also several drawbacks that should be considered. Relying on competitor pricing information can lead to a race to the bottom, with companies competing to offer the lowest prices rather than focusing on quality or value.
This approach can also lead to price wars, which can damage relationships between companies and erode profits. Constantly changing prices can be confusing for customers and make it difficult for them to comparison shop.
As a result, while this can be effective in some cases, it is important to weigh the potential drawbacks before making a decision.
Hope you found some valuable insights in this article about shifted market pricing strategy!
Also, Check Out:
Competitor Based Pricing Strategy
