27/01/2026
Pricing Strategy
Pricing Strategy is the method or logic a business uses to set the prices of its products or services. It isn’t just about picking a number; it’s a calculated move to balance profit, sales volume, and market competition.
Think of it as the "personality" of your store—are you the affordable "everyman" shop or the high-end boutique?
Common Pricing Strategies
Here are the most effective strategies used in the consumer goods (FMCG) and retail industry:
1. Cost-Plus Pricing (The Basic Way)
You simply calculate the total cost to get the product to the shelf (Unit Cost) and add a fixed percentage (Markup) for profit.
Best for: Small businesses and those with stable costs.
2. Competitive Pricing (The Safe Way)
You look at what your neighbors or competitors are charging for the same soap or cooking oil and set your price slightly lower, higher, or exactly the same.
Best for: Commodity goods where customers compare prices easily.
3. Psychological Pricing (The "Brain Hack")
Setting prices that look "cheaper" to the human eye.
Examples: Using 9,900 MMK instead of 10,000 MMK, or "Buy 1 Get 1 Free" (BOGOF).
4. Loss Leader Pricing (The Customer Magnet)
Selling a popular item (like eggs or rice) at a very low profit or even a loss to get customers into the store. Once they are inside, they usually buy other high-margin items.
Best for: Supermarkets and grocery stores.
5. Pe*******on Pricing (The Market Entrant)
Setting a very low price when you first launch to attract customers away from established shops. Once you have a loyal base, you slowly raise the price.
Best for: New brands or new shops.
How to Choose the Right Strategy?
To pick the best one, ask yourself these three questions:
Who is my customer? (Are they budget-conscious or looking for quality?)
What is my goal? (Do I want to sell a lot of items quickly, or make a high profit on a few items?)
What is the competition doing? (Can I afford to be more expensive than them?)