Penetration Pricing

When a company charges a low price (usually when the product is new) to try and increase sales and market share in the short term. They usually do this when they have a large amount of competition in the market already.


Price Skimming

When a company charges a high price to only appeal to select customers who have a large amount of money to spend. They will typically do this when a product is new and then bring the price down over time.


Loss Leader

When a company sells one of its products at a loss, with the long term aim that once a customer buys one item, they will by others which are priced up at full price. This will work best when one product will compliment another.


Price Taking

When a company will just use the same price that its rivals use. This typically happens where they have confidence that the features or added value of their brand will outsell their rivals.