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How should small businesses use pricing strategies in marketing?

What are the different pricing strategies commonly used? How should small businesses use them as part of their marketing strategy?

Top voted answer
John Eustace

John Eustace, Principal / Communications and Media Strategist at Bells and Whistles Marketing Pty Ltd

A pricing strategy that I liked a lot was encountered when I was invited to the “Wall Street” bar in Kuala Lumpur.
Wall Street is a bar in the heart of Kuala Lumpur's business district. Its drinks prices fluctuate every few seconds, like shares listed on a stock market: when demand for a certain beer increases, so does its price; when vodka is not selling too well, the cost of a shot comes down.
Management never let the prices get too high so they are unaffordable. Nor do they let the cost of a drink slip below their basic profit margin, except perhaps during a market crash. A few times each evening, prices of certain drinks, plummet to “record lows”, as if they were unpopular shares on the Malaysian stock exchange prompting a surge of buying activity.

Jon Manning

Jon Manning, Founder at

This a HUGE questions.

At a basic level, you can use whats known as a skimming pricing strategy for premium-priced products - think Apple, or LVMH.

Or you can use a penetration pricing strategy - think Reject Shop, Low Cost airlines.

A neutral strategy is somewhere in between.

Then you can try different pricing models - Uber's surge pricing is a branch of dynamic pricing which American Airlines started in the 1970s after the industry there was deregulated. Now used by hotels, advertisers, car rentals, etc.

Subscription models are de rigour these days, but be careful - in B2C land, consumers are getting subscription fatigue.

If you want to use pricing as part of a marketing  / PR campaign, think outside the square,

You could do what a hotel in Germany did a couple of years back and charge guests 50 eurocents per kilo of weight. Don't worry, there was also a room rack rate option. 

A low cost airline flying from Newcastle (UK) to Germany allowed customers to PWYW (pay what you want). Jon Bon Jovi has a PWYW restaurant in New Jersey, and successfully utilise this pricing model, with alot of help of behavioural economics.

And there is a comedy club in Spain that charges 30 eurocents per laugh. The lesson here is they have worked out what customer value, and your price is the exchange rate on the value you provide. Forget about costs - customers don't care about costs, they care about value.

I could go on, and on, and on....