High low Pricing strategy: definition, pros & cons

High-low Pricing

Definition of High-low Pricing

This pricing strategy incorporates pricing the majority of your items above the market and a few of them underneath that rate with the help of discounts and sales.

High-low Pricing

Description of High-low Pricing

Stores that utilize this approach put all of their advertised items at the back of the store. Shoppers look at all of the products prior to reaching the cheapest.

Advantages of High-low Pricing

This strategy helps bring shoppers into their store by getting their attention with the low priced items, and hopefully they will purchase an expensive item there as well. If customers end up buying a few extra full priced products alongside those with a discount, this strategy can help immensely increase profit. This is also a great marketing strategy since you always need to be promoting those items that are on sale.

High-low Pricing

Disadvantages of High-low Pricing

You do have the chance of losing profit, though, if you don’t put the less expensive items in the right place or if your customers are more price conscious since you’ll actually end up losing money with this strategy. It’s also fairly expensive to have constant marketing campaigns going on.

High-low Pricing