What is a product line pricing?
What is a product line pricing?
Product line pricing is oriented on separating goods into cost categories in order to create various quality and feature levels in the minds of consumers. This strategy is typically adopted where you wish to market to different customer types or wish to anchor your products.
What is the best definition of product line?
A product line is a group of related products all marketed under a single brand name that is sold by the same company. Companies sell multiple product lines under their various brand names, seeking to distinguish them from each other for better usability for consumers.
What does target pricing mean?
A target price is an estimate of the future price of a stock. Target prices are based on earnings forecasts and assumed valuation multiples. Target prices can be used to evaluate stocks and may be even more useful than an equity analyst’s rating.
Why is product line pricing?
Product line pricing involves the separation of goods and services into cost categories in order to create various perceived quality levels in the minds of consumers. You might also hear product line pricing referred to as price lining, but they refer to the same practice.
What is product pricing example?
Quick Reference. Setting the price for by-products in order to make the price of the main product more competitive. For example, in producing processed meats, chemicals, or oil there are often by-products, which – if they had to be disposed of – would make the main product uncompetitive.
How is product line pricing helpful to both retailers and their customers?
It is the process that retailers use to separate goods into various cost categories creating different quality levels in the minds of their customers. Product line pricing is more effective when there are ample price gaps between each category so that the consumer is well informed of the quality differentials.
What is product line give example?
In simple terms, product line is a subset of product mix. Now, let’s assume that this company sells 3 types of milk, 15 cheese products, 2 butter products, and 10 diet products. These product groups are the product lines and an assortment of these product lines is the product mix of the company.
What is product and product line?
June 10, 2021. Many businesses that sell multiple products use product lines and product mixes to monitor the different products they produce and sell to customers. While a product line refers to related products sold in a business, the product mix is the total number of all products a business sells.
How do you use target pricing?
Target Costing. Target costing estimates product cost by subtracting a desired profit margin from a competitive market price. As the target cost makes reference to the competitive market, it is fundamentally customer-focused and an important concept for new product development.
How do you achieve target pricing?
Target costing has four steps:
- Design a product that provides the features and price demanded by customers.
- Determine the company’s desired profit.
- Derive the target cost by subtracting the desired profit (from step 2) from the desired price (from step 1).
- Engineer the product to achieve the target cost (from step 3).
Who uses product line pricing?
Product line pricing is also common in other retail shopping scenarios. This pricing strategy is particularly popular in retail clothing stores. Companies sometimes offer multi-level products within one store, and other times they create multiple brands or stores to market and sell their varied item types.
What is product pricing strategy?
A pricing strategy is a model or method used to establish the best price for a product or service. It helps you choose prices to maximize profits and shareholder value while considering consumer and market demand.