Keeping in mind the market scenario and customer demand, businesses often create different pricing strategies to optimize their profits and increase their shareholding value. These strategies or methods of pricing used by businesses are called pricing models.
It is a process of identifying an ideal price that will not only help the business earn maximum returns from their goods, but will be determined by various other factors such as economic trends, market trends, customer demands and an analysis of competition.
Based on the target market, target audience, the domain of the business, nature of the product and other such factors, businesses can have one or various pricing models that can help them earn a premium from the market and maximize their profits while sustaining their brand value.