Abstract:
Pricing is a crucial aspect of a business strategy, as it directly impacts revenue and profit
margins. Optimal pricing strategies are those that take into account consumer behavior and
market conditions to set prices that achieve business goals. Understanding consumer behavior is
crucial in designing optimal pricing strategies because pricing decisions can significantly affect
consumers’ purchase decisions. There are various approaches to determining optimal prices,
such as cost-plus pricing, value-based pricing, and demand-based pricing. (Kotler and Keller
2012)
Choosing the right pricing strategy can be challenging, as it depends on various factors such as
market competition, consumer behavior, and the unique characteristics of a business and its
offerings. Therefore, companies often experiment with different pricing strategies and
continuously analyze and adjust their pricing to ensure they remain optimal. (Nagle and Muller
2018)
