Align or Determine An Optimal Gap

To set the right price, we can refer to the costs of competitors’ products.

• A company may seek to align,

• or, on the contrary, determined an optimal price difference concerning its competitors.

When should you seek to align your prices? When the price elasticity of demand is very high, it is common to seek to sell one’s products at the same price as one’s main competitors (sometimes referred to as “market price”).

In other circumstances, one can estimate the optimal distance to establish concerning competitors, depending on the product’s characteristics and position in the market.

• If, for example, the product sold is of superior quality or benefits from better notoriety/image, an additional price can be set to be requested from customers taking into account these advantages.
• If, on the other hand, a product suffers from certain handicaps compared to competitors, then a price should be set at a level slightly lower than that to compensate for these handicaps.

The Case of e-commerce: a Dynamic Pricing Strategy That Can Be Automated

It is possible for companies that sell online to automate their strategy with dynamic prices that vary according to competing prices.

To do this, all you have to do is equip yourself with software. Such tools allow you to put “rules” on your prices based on your competition, your product category, and the margin levels you wish to maintain.

Position Yourself As The Highest or Lowest Price

One approach to determining the price of its products can be to position itself as the most expensive / the least costly in its market.

Let us examine the two options in turn.

Highest Price Strategy

It is a strategy that can be used when the company wishes to:

• maintain a certain level of profits, without concession,
• increase overall profitability,
• improve the brand image by playing on the perception between price & quality

This strategy requires having a product that justifies its premium price by an innovative patent or if it provides a remarkable consumer benefit.

Lowest Price Strategy

Having a “lowest on the market” price policy can be a long-term strategy (to reinforce a marketing positioning) or a short-term strategy (guaranteeing the lowest price for a given period, such as during a chestnut tree, for example ).

The objectives pursued by a company that practices the lowest price strategy can be:

• quickly gain market share,
• to defend its market shares in the event of the arrival of new entrants,
• to expand its distribution network.

Adopt a Pricing Policy Based On Your Production Costs

A Pricing Strategy That Consists of Adding a Margin to its cost price

This pricing strategy depends on the costs that the company must assume to manufacture a given product. This involves adding a margin that is deemed reasonable to the unit cost price of the product.

A More Complex Pricing Policy Than It Seems, With Weaknesses

Despite its “simplistic” appearance, this strategy can be complex to implement. Indeed, what should be included in the cost price of a product?

For a trader, the price is simply the price at which the goods are bought before being resold. It is then enough to add a certain margin percentage or apply a multiplier coefficient.

On the other hand, if the company manufactures a product, the calculation of its cost price is more complex. Indeed, production costs are broken down into unit variable costs plus a share of fixed costs. However, the number of fixed costs allocated to each unit depends on the number of units sold, which can never be predicted very precisely.

Another limitation of this pricing strategy is that it does not consider the impact of price on sales volume. This forces the company to correctly calculate its breakeven point, i.e., the activity level for which the company balances its operations (the profits generated by sales exactly cover the costs incurred).

Skimming Price Strategy

A High Price Initially, Which Decreases Over Time

A skimming pricing policy involves launching a product by setting a high price and then gradually lowering it over the product’s life cycle.

This strategy allows the company to generate strong margins when the product is in the launch and growth phase and then extend its distribution when the market matures.

When To Use a Skimming Pricing Strategy?

The skimming pricing strategy is relevant when the product launched is different from its competitors (through innovation, for example). It is easier to justify a high price to customers in such a situation, such as distributors.

The basic assumption is that the elasticity of demand will be low at product launch since consumers will have no points of comparison. It will only be when the competition begins to copy the product that the price will start to fall gradually to continue penetrating market segments that are more sensitive to the price variable.

The Penetration Price Strategy

Sacrificing Short-Term Profitability To Gain Market Share

The opposite of the skimming pricing policy is the penetration pricing strategy. With this approach, the company attaches more importance to maximising its sales volume than maximising its short-term profitability.

When To Use a Penetration Pricing Strategy?

A penetration pricing strategy makes sense if:

• it is necessary to stimulate demand in a completely new market,
• the elasticity of sales concerning price is substantial,
• a significant increase in production makes it possible to lower the cost price of a product significantly
• the brand wishes to dissuade competitors from entering the market segment it occupies,
• by-products occupy the high-end part with a high price but a relatively low price/quality ratio.

A Pricing Policy That Targets The Psychological Price

The Concept of Price Acceptability Zone

The consumer sometimes tends to associate a low-quality image with a low price and a high-quality image with a high price. However, he is not willing to pay an exorbitant price.

Therefore, the optimum psychological price is in a range limited at the top by an income effect and the bottom by a quality impact: this is the zone of acceptability of a fee.

There is a method for determining the acceptable price (or psychological price) for the most significant number of consumers.

How Do You Determine The Psychological Price of a Product?

A survey should be carried out on a representative sample of potential customers. This survey asks two questions:

• Above what price do you consider this product to be too expensive?
• Below what price do you believe this product to be of poor quality?

The survey results show the percentage of people who consider the price acceptable, i.e., neither too expensive nor too low. This percentage is given by the difference between the cumulative curve of minimum prices and maximum prices. The optimum psychological price corresponds to the most significant difference between the two curves.

Although attractive to the marketer, this pricing strategy has two main limitations:

• Respondents’ statements are not always predictive of their actual behaviour at the time of purchase.
• The method does not take into account the influence of competitors’ prices.

The Pricing Strategy Articulated Around The Product Range

The price of a product influences its sales and those of the other products in the range.

Sometimes the pricing policy may aim to facilitate the sale of other company products.

However, the different models of a range are sometimes in competition. In this case, the price of a product has an influence not only on its sales but also on those of others.

The Call Price Strategy or The Case of Products That Require The Purchase of Ancillary Supplies

It is possible to set a meagre call price for an entry-level product (on which the margins earned will be low) to have the same customer discover and sell other more expensive models.

Another variation of this strategy applies when a product requires the purchase of ancillary supplies. This is the case, for example, of printers, which can only be used by purchasing ink cartridges. In this case, a company can promote the equipment of the product by an aggressive pricing policy and catch up on the margins achieved by the “consumables.”

Conclusion

Due to the dual influence that price has on sales volume and profitability, defining the “right price” is a significant marketing challenge. In some cases, it may be wise to start by setting a target price, then deduce the product attributes and the rest of the marketing strategy based on this variable.

Let’s not forget that other factors can also influence your pricing strategy:

• the effect of experience which, thanks to economies of scale, reduce the cost price of a product as the quantities produced by the company increase
• the price elasticity of final demand, which measures the influence of the selling price of a product on sales volumes

The post Seven Out-Of-The-Box Pricing Strategies Used By The Pros. Marketing appeared first on TechReviewsCorner.

Every year, the tech sphere gets new upgradation and innovations. One of the latest addition is test automation which fastens the software development life-cycle by supporting the manual test approach.

From building to deployment, a user has a bucket full of expectations from any software application, and this is why creating a software application is not so simple. Throughout the building process, you may face a lot of bugs and failures.

The situation may even get worse when your application faces security breaches. To maintain the software application’s smooth and bug-free working, you must use the Automation Testing tool. A perfect test automation strategy effectively establishes the foundation of software success.

What is Test Automation?

Automation testing strategy includes using different tools and pre-written scripts to perform level-based tests and check for the success rate of software.

The test automation strategy aims to audit the risks, communicate, spot defects, and find software capabilities; thus, perfect automation strategies are required for the success of the software.

When the software testing team levels up, they need Automation Testing tools, and business demanding Test Automation Strategy arises to make testing easy and smooth.

The most important key factor in automation testing is to create a cost-effective test automation strategy with a result-oriented approach. Several vital factors help build effective test automation strategies to assist businesses in avoiding major technological failures and keeping up with the market demand.

But, it’s essential to check whether the strategy built towards test automation is result-oriented or not because defining all the key metrics is easy with result-oriented automation for software.

Six Major Keys for Automation Success

1. Check For Project Requirements

For the success of any project, it’s crucial to maintain the quality of the application and deliver a bug-free product. And to improve the quality of the project, Automated testing can help by increasing the depth and scope of the tests.

To begin your testing, you first need to check for your project requirements and create a track for it. Things you need to check include-

• Any estimations
• Review processes
• Sign off criteria

You need to check whether each of these milestones very precisely that it qualifies as per the checklists or not. These checks are made using statistical data. You must make sure that you base assessments on complexity, stability goals, repeatability, regression/non-regression, number of running frequency,  and ROI.

You can simplify these checks into three different sections.

• Type of project like web/desktop/mobile

• Scope of the project

• Existing team’s strength in code language

Moreover, the test automation strategy with the final endpoint makes it easy to plan the route!

2. Plan The Test Approach

After analyzing the business requirements, planning the right approach and automated tests level comes next. When you have the goal ready, then you’ll need to identify:

• What do you need to include in the automation test?

• How is the team going to work in executing the automated tests?

When defining the test approach, you must ensure that it includes allocating the proper framework and testing types to proceed with the automation. Moreover, your plan should include how the execution order of multiple testing types will process, such as unit testing integration testing.

This is where the Automation Testing Pyramid comes into play. An Automation Testing pyramid refers to a complete testing procedure with three major sections-

• Unit tests: At the lowest level.
• Integration tests: At the middle tier.
• End-to-end tests: These tests form the base of the pyramid.

Using this testing pyramid guide, you can choose all required tests you want to include in your software test automation strategy.

For more accurate outcomes, it’s crucial to strategize test execution, role, frequency, and time results.

Let’s understand this through an example:

You created software with a login page where you implemented form validations to accept input. How will you proceed? What tests will you include?

This is where you understand the importance of automation testing and why a correct test approach is mandatory for effective automation. Test automation covers several different test case design elements with priority checks.

3. Setting Up Tools and Required Test Environment

It’s crucial to have the right tools/frameworks before you move forward to test the automation strategy. Choosing the right tools will make automation testing highly beneficial for the software development life cycle.

But, how to say a tool is perfect? With consideration with the project team and checking for the requirement, you can easily choose the right automation tool.

You can check several automation frameworks as per license, commercial, and whether open source or not. To select the best Automation Framework for your software, you have to check it for your classification, as you need it for web testing or mobile app testing. Apart from categories, budgets play an essential role.

When it comes to testing automation frameworks, Selenium is the only pick where 21.4% of the organizations prefer it over other frameworks in web automation. And for Mobile Testing, Appium heeds the board with 15.4% of organizations’ preferences.

Choosing an automation tool that supports testing on almost all platforms and environments is better and delivers the most effective testing proves crucial.

LambdaTest offers some most popular software Automation Testing tools like Selenium, Cypress, Appium, HyperExecute, and more to accelerate your release velocity. With blazing test automation on the cloud, you can move your business to the next level.

LambdaTest is a cross-browser testing platform that allows you to test web apps hosted publicly or locally on various browsers, operating systems, and devices.

4. Consider a Good Testing Team

A project team consists of individuals with different roles. like-

• Developers: Who develop the codes as per the requirement
• Debuggers: After writing the complete code, it’s time to bug-free the software, which is what Debuggers do.
• Testing Team: They will use the test automation tools to perform various tests.

Testing in any project should be those people who have industry experience and are also familiar with the latest testing tools.

The entire testing team consists of people holding four different key roles; these are-

• Test Manager: This is responsible for planning the entire test, checking coordination, and controlling all test activities.
• Test Analyst Designer: They design, develop and then administer tests. Test Analyst Designer also monitors the evaluations to identify if there’s any major issue with the product.
• Developers in the Test team: They develop software, tools, and automated tests for testing.
• Tester: These are those people who hold the most crucial roles to log and execute the tests, evaluate the final results, and then document problems if found.

Going with Automation Testing will reduce the manual testing workload of spotting and fixing minor bugs and issues. But, this only happens when the team finds it compatible working with the selected tool.

Different testers have experience with varying stacks of tech and tools. So, it’s crucial for the entire team that you consider the appropriate automation tool that can benefit all. Also, ensure that the testing team must sync with your selected automation tool.

5. Result And Documentation

As a final result of an automation test, the documentation determines whether the software functionalities are working as expected. If it works as expected, then voila!

The complete automation testing process is tedious, but with proper documentation and appropriate decisions, you can get your job done in seconds.

But, what when tests fail or catch any bug? When there’s a bug or the test produces any defect, you have to plan a proper flow of further steps to solve it and decide to whom this issue is to be assigned. That’s why adequate documentation becomes crucial to handle bugs much more manageable.

Final end-end documentation includes a list of tests for functionality. This includes:

• Result-analysis,
• Results,
• Assignee,
• Workflow,
• Assignee, and
• Other test cases.

6. Test Automation Is Not a Solution For Everything

Test Automation can solve significant software issues and spot bugs before users, but this doesn’t mean that it is the one-size-fits-all solution for all software issues. Here’s are some examples of tests that you cannot automate using any automation tool-

• Exploratory tests
• API tests
• UX tests
• UI tests

So, it’s essential to move out of the misconception that choosing the best Test Automation tool can automate anything.

The primary role of automation tools is to make the automation process easier and faster when you recruit and loop in proper techniques to meet the required goal and business demand.

Figuring out the challenging things for Automation tools comes under the test engineer’s job role, but you can save time and effort for your team by spotting it early.

Achieve Automation Testing Success With LambdaTest

Test Automation proved to fasten the software development life-cycle by generating a massive return in a short time and effort. In the beginning, you may find some loopholes in the automation process, but when time passes, you learn everything, and then pieces fall into place! You can eliminate these loopholes with LambdaTest.

LambdaTest is one of the most popular Online Automation Testing frameworks that offers some advanced software Automation Testing tools like Selenium, Cypress, Appium, HyperExecute, and more to accelerate your release velocity. The cross-browser testing feature of LambdaTest allows 3000+ browsers and nearly all major operating systems for test automation.

Here, you will get vast testing features to make web testing simple; like

• Integrated Debugging: To debug issues during live testing.
• Seamless Collaboration: LambdaTest allows you to integrate with your favorite tools.
• Locally Hosted Web Testing: To prevent after-deployment bugs.
• Geo-Location Testing: To experience seamless testing in any location.

So, get ready to strengthen your Automated Testing journey with LambdaTest!

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