with a new product and you want to gain as many customers as possible.   When to Use - If you have a big "back-end" product that you plan to sell as a follow up to the lower priced "front-end" product. Or it might be that you have a consumable product that people will buy over and over again so you want to gain customers, get them hooked on your product or service, and then slowly raise the price.   -------------------------------   Strategy #2 - Pricing high to skim maximum profits.   Objective - To gain the maximum amount of profit per unit in the shortest amount of time.   When to Use - When your product is unique and new with no competition and you have a short window to skim the maximum profits before knock-offs start flooding the market.   -------------------------------   Strategy #3 - Pricing low to crush the competition.   Objective - You want to squeeze your competition out of the marketplace so they no longer compete with you.   When to Use - Your product is a perceived commodity and you have one or two competitors with which you are constantly having price battles. (By the way, technically this practice is illegal) -------------------------------   Strategy #4 - Pricing to make a "normal" profit.   Objective - To set a price that is seen by your customer as honest and reasonable.   When to Use - You may be on contract (such as a government contract) with a customer that you have a long-term relationship with and whose trust you value immensely (and who does periodic audits on your books). In this case you might use a cost-plus pricing strategy. -------------------------------   Strategy #5 - Pricing to the market to be competitive.   Objective - When you want your stay competitive and be considered for any proposal, bidding, auction or other competitive pricing situations. When to Use - When your product is very similar to your competitors and you are limited in the methods you can use to differentiate it.   -------------------------------