What is segment pricing?

What is segment pricing?or push pull strategy?

Segment Price strategy means offering product price according to the market segment while considering their purchasing power or simply we can say that offering different prices to different market segments. As an example, imagine that your business only offers one product priced at Rs 50. But some consumers are willing to pay up to Rs 80. You are leaving Rs 30 on the table for each of them. Other consumers are more price-sensitive and only willing to pay Rs 30. You do not get any of their business. With price segmentation more revenue is generated by offering three prices - Rs 30, Rs 50 and Rs 80 – instead of just one - Rs 50.

Push strategy

A “push” promotional strategy is used to create market demand by offering incentives to the sales force, retailer, whole sellers and distributors..

The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers.

Pull strategy

A “pull” selling strategy in which demand is created in the market by using heavy advertisement and promotional campaigns

If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.