The process of setting and communicating prices to businesses and organisations that the company sells to is known as B2B pricing.
There are three main types of B2B pricing strategies: Cost-plus pricing, competitor-based pricing and value-based pricing. While cost-plus pricing is the most straightforward B2B pricing strategy, it has certain limitations. Cost-plus pricing can provide a consistent rate of return and does not require market research or competitor analysis.
A competitor-based pricing strategy can help brands maintain their market share. But, this strategy is not effective in the long-run. Value-based pricing is a more research-based, long-term strategy.
Though value-based pricing can help increase the brand’s profit more than the other two pricing strategies, it is time-consuming. All these strategies are effective depending on the business objective. Marketers need to consider their product type, market growth dynamics and customer traits to create a robust B2B pricing strategy.
[10 minute read]