Price is an important part of the marketing mix and businesses will use pricing policies that they see as most appropriate for the circumstances that exist in their target markets. When deciding a pricing strategy, a business will try to coordinate this with the other elements of the marketing mix, as shown in Figure 1.
Traditionally the main types of pricing strategy used by businesses included costplus pricing, price skimming, penetration pricing, predatory pricing, competitive pricing and psychological pricing. These are all forms of static pricing, meaning that a fixed price point is set by the business and maintained for a certain period of time.
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