This power point presentation explores pricing across product life cycle in case of industrial products. The topic is related to Industrial Marketing

1. Pricing Across Product Life Cycle
Introduction Stage Pricing Strategy
There are two strategies available for a new
product which is in the introductory stage of its
life cycle . These are
(I) Skimming ( High Initial Price ) strategy
(II) Penetration (Low Initial Price ) strategy

2. • Skimming Strategy – This strategy is used for a
distinctively new product which is to be
purchased by a market that is not sensitive to
the initial high price. An Industrial marketer
thereafter reduces the price to reach other
market segments that are more price
sensitive.
• Penetration Strategy- This strategy is effective
when (i) price elasticity is high or buyers are
highly price sensitive (ii) strong threat exists
from potential competitors (iii) opportunity
cost exists to reduce the unit cost of
production and distribution with increase in
volumes.

3. Growth Stage Pricing Strategy
During the growth stage of the product , new
competitors enter the market and more customers
start using the product. Industrial marketers
therefore , face a pressure of lowering the price
below the introduction stage. In the growing
market , the industrial marketers tends to focus on
product differentiation, product line extension and
building new market segments. Industrial buyers
follow the purchasing policy of developing more
than one supplier as more supplier enter the
market. This puts the pressure on the innovator firm
to lower the price.

4. Maturity Stage Pricing Strategy
In the maturity stage of the product, the
competitors are well –entrenched and
aggressive. To increase the sales volume , the
marketer has to cut into the competitor’s
market share. This can be achieved by adopting
the pricing strategy of lowering the price to
match the competitor’s prices.

5. Decline Stage Pricing Strategy
In decline stage ;
• if the company has built a reputation of good
product quality and dependable service, it need
not cut the price but reduce the costs to earn
some profits.
• Another strategy is to cut the prices to increase
the sales volume above break-even volume and
use the product to help sell other products in the
product mix.
• If Some of the competitors have withdrawn from
the market, the industrial marketer can even
consider selective increase in prices for some
segments of the market which are not price
sensitive.