A pricing strategy that works well in one type of business might not translate well to another type of business.
For example, discount clothing retailers utilize frequent sale promotions to drive traffic to their stores. The consumers who shop at these stores are very price sensitive, so the pricing fluctuations actually keep them engaged. Customers will return repeatedly, hoping to find the best bargains. These retailers rely on high volumes to drive their profitability.
On the other hand, manufacturers of durable capital machinery have a very limited target market. Only a small number of businesses are going to purchase a new printing press, or a new bulldozer, in any given year. These customers are price conscious, of course, but price is not the only factor they consider. For these customers, performance and reliability are more important than the upfront cost. If a piece of capital equipment breaks down in the middle of a critical job, the lost revenue can be catastrophic for a business. It’s better to pay a little more for a better piece of machinery that will require less maintenance. Therefore a marketer of high-end capital goods might be able to charge more than the competition and still make the sale.
Which strategy will work better for you? As with everything in marketing, it depends on your customer.