Product classification plays a significant role in determining pricing strategies. For example, premium products, which fall under the specialty products category, are priced higher due to their exclusivity and quality. Marketers for these products use pricing as a tool to communicate value and appeal to high-income consumers.
On the other hand, convenience products, which are inexpensive and purchased frequently, require a low-cost pricing strategy to encourage impulse buying. By understanding the classification of a product, businesses can implement a pricing strategy that aligns with customer expectations and market trends, ensuring both competitive advantage and profitability.
How Product Classification Helps with Pricing Strategies in Marketing