Two variants of pricing policy

From the very beginning it is necessary to decide what policy of the pricing you will lead. It will depend on the kind of the goods or services which are offered in your shops as well as on your potential clients.
Besides, your pricing policy will be connected with preparation of your plan of marketing directly. Let`s consider possible variants of a pricing policy . The simplest approach supposes that there are two opposite variants of pricing policy: the big volume / the low price and small volume / the high price.
The big volume / the low price.
We will consider at first the variant «the big volume / the low price». The similar policy is lead frequently by supermarkets. They sell «a heap of the cheap goods». The general idea of this variant is the following:« I sell one million things during the year and I ask one dollar for one thing. As a result, I receive one million dollars of annual profit».
If there is a hot competitive struggle at your marketplace and consumers are tempted not to spend money for purchase of more expensive goods, it is better to use this pricing policy. It can be especially good when it is necessary to get rid of the stale goods, to sell the rests of warehouse stocks.
It is necessary to be assured that such approach to pricing provides a sufficient profit level. Actually, to compete only at the expense of maintenance of very low prices for the goods or services without enough serious reasons is not the best variant of commercial activity.
Small volume / the high price
And now let`s consider another variant. Here we deal with a different idea« I sell one thousand things during the year and I ask one thousand dollars for one thing. As a result, I receive one million dollars of annual profit during the year a».
If you work in the market of rare, exclusive goods and your clients do not pay attention on the goods price, it is possible to carry out this policy of the prices.
In this case the people appreciating convenience, exclusiveness, service at high level etc. will be your clients and they will be ready to pay  your services or goods. This strategy is good when your goods or services are really exlusive and there are no rivals in the market.
If you get goodprofit, soon you will face the competitors, that`s fo sure. In that case it is possible to reduce the price and to keep high profit level all the same.
We have considered only two opposite kinds of pricing policy. Actually there is a set of intermediate variants.