Determining the cost for a new product is an important step that affects the success of the product in the market. The level of profit from sales, the first perception of the product by the target audience, opportunities for increasing profits in the long term, as well as the overall competitiveness of the product depend on the initial price of the product. If the initial price is set incorrectly, even a good product can fail.

In this article we will talk about two opposing pricing strategies (approaches) to setting the price of a new product: “cream skimming” and “market penetration” pricing policies. Each pricing strategy has its own advantages and disadvantages. In what situation is it more profitable to use each of the above price competition strategies, read our material.

Skimming strategy

Skimming pricing strategy is a competitive pricing marketing strategy that involves setting a deliberately high price for a new product. An inflated price is necessary to obtain super-profits, which in a short time recoup the investments spent on the development, production and launch of the product on the market.

When choosing a “skimming” strategy, do not forget to reflect in your marketing plan the price that you plan to reach in the long term and plan the stages and conditions for a gradual reduction in the cost of the product.

There are four reasons why a company might decide to use a skimming pricing strategy: high initial costs, unique benefits, limited production capacity, and inelastic demand for the product.

High initial costs

If large resources were spent on the development of a product, only excess profits will ensure that they are repaid in the shortest possible time. If, at the stage of development of a high-cost product, there is no confidence in the possibility of setting inflated prices, it is better to close such a project or postpone it until “better” times.

Unique properties of the product

A product with unique advantages may be sold at an inflated price, since it has no direct analogues. This is why the skimming strategy is often used by all new technological products, new computer technologies, and new drugs. In such a situation, the important point is the long-term protection of the product's competitive advantage.

Patents, a complex production cycle, unique personnel, and a unique, difficult-to-repeat company business model will allow you to protect the sustainability of your competitive advantage. A high price can be justified by the consumer if the product provides unique benefits and has unique characteristics for which the consumer is willing to overpay.

Example of unique characteristics: a completely new product that creates a new market without competitors (Ipad); a product with unique properties, which is a new generation in the existing market; a product that satisfies existing needs better, more efficiently, with better quality, faster.

In fact, the consumer may not be satisfied with the cost of the product, but the desire to acquire unique benefits forces him to overpay for the product. In this case, when worthy substitute products with a lower price appear, an instant switch will occur.

Limited capacity

Limited production capacity or high demand is another reason to use this type of pricing strategy. By inflating prices, the company reduces the purchasing power of the market. If during the first months of sales it is predicted that demand will exceed supply, then an inflated price is the only way to get maximum profit from sales.

Inelastic demand

Inelastic demand means low sensitivity of the buyer to the cost of the product. At any price, the product will enjoy the same level of demand. Undoubtedly, there is always a price limit for the inelasticity of demand, but if there is a large corridor of the cost of a product in which demand remains at the same value, the maximum price of the “cost corridor” is always set.

Market penetration strategy

A market penetration pricing strategy involves setting a deliberately low price for a new product. The goal of this strategy is to create market recognition, ensure the necessary level of trial purchases, maximize sales in the short term and achieve a high market share. When choosing a penetration strategy, it is necessary to reflect in the marketing strategy the price that is planned to be reached in the long term and plan the stages and conditions for a gradual increase in prices.

Terms of use of the strategy

In practice, there are 5 reasons on the basis of which a company may decide to use a segment penetration strategy when approving a pricing strategy: highly elastic demand, low initial costs, high reaction speed from competitors, economies of scale in the absence of restrictions on production capacity .

Highly elastic demand

A pricing market penetration strategy works best in an industry in which consumers are price-sensitive and therefore willing to switch to lower-cost product options at any time.

Low start-up costs

The low level of R&D costs and initial marketing expenses allows, even with a low cost of the product, to recoup expenses in a short time and reach the required level of profit.

High reaction speed from competitors

In markets where competitors can quickly respond to the company's actions, it is advisable to use a market penetration pricing strategy. The ability of competitors to quickly react to the release of a product is possible under the following conditions: the lack of uniqueness of the product, the ease of copying properties, the inability to protect the unique properties of the product.

Economies of scale

Economies of scale and competitive cost structure are one of the main reasons for using an industry penetration strategy. But you should always remember that such a strategy can lead to retaliatory measures of price reductions from competitors and the outbreak of price wars. Therefore, a company choosing this strategy must be able to survive periods of low profit or have the competitive advantage of producing a product at a low price.

No capacity limitations

The penetration strategy can ensure the achievement of high market share and high growing stable sales. The company, if unable to meet demand in the long term, will suffer losses in terms of lost profits.

This strategy consists of setting a high price for a product in a small market segment and skimming the cream in the form of high profitability of sales. The price is kept high so that new buyers entering this market segment reach a qualitatively new, higher level. The use of this strategy becomes possible when the product has an advantage over analogues or is unique.

Demand following strategy

This strategy is similar to the skimming strategy, but instead of holding the price at a constant high level and convincing buyers to enter a new level of consumption, the price is reduced under strict control. Often a product receives minor changes in design and features to make it significantly different from previous models. Sometimes, to accommodate a price reduction, the product's appearance, promotion, packaging, or distribution method must be changed. The price is held at each new reduced level long enough to satisfy all existing demand. As soon as sales volume begins to decline significantly, you should prepare for the next price reduction.

Penetration strategy

Price breakthrough, as the name implies, is setting a very low price to penetrate and develop activities in a new market in the shortest possible time, in order to secure cost advantages from production volume. This strategy is not suitable for a small company, since it does not have the required production volumes, and the retail trade of competitors can react very quickly and harshly.

Strategy to eliminate competition

The strategy of eliminating competition is similar to the penetration strategy, but is used for different purposes. It is designed to prevent potential competitors from entering the market, its other purpose is to achieve maximum sales before a competitor enters the market. The price is therefore set as close as possible to the costs, which gives a small profit and is justified only by the large volume of sales. A small company could use this strategy to concentrate its activities on a small segment of the market: quickly enter it, quickly make a profit, and just as quickly leave this segment.

In addition to the strategies described, others are possible:

maintaining a stable position in the market (maintaining a moderate percentage of return on equity: in the West 8-10% for large enterprises)
maintaining and ensuring liquidity - the solvency of the enterprise (this strategy is mainly associated with the selection of reliable customers who could ensure a stable flow of funds into the company's account, which is associated with the transition to types of payment that are beneficial for customers, providing customers who are impeccable in payments with discounts on prices and etc.)
pricing strategy aimed at expanding the export capabilities of the enterprise (it is associated with the strategy of “skimming the cream” in new markets).

Prohibited Strategies

There are also a number of strategies that an enterprise is not recommended to use, since they are either prohibited by the state or go against market ethics. The consequences of using such strategies may be the application of sanctions by government authorities or retaliatory measures by competitors. Prohibited strategies include:

monopolistic pricing strategy - aimed at establishing and maintaining monopolistically high prices. Usually with the goal of obtaining excess profits or monopoly profits. Prohibited by law;
dumping price strategy - i.e. market prices deliberately lowered by the enterprise in comparison with the existing market price level in order to obtain major advantages over its competitors. This pricing strategy is a monopolistic activity;
pricing strategies based on agreements between business entities that limit competition - including agreements aimed at:

establishment of prices, discounts, surcharges, markups;
increasing, decreasing or maintaining prices at auctions and trades;
division of the market on a territorial basis or any other basis, restriction of access to the market, refusal to enter into contracts with certain sellers or buyers;

pricing strategies leading to violation of the pricing procedure established by regulatory enactments;
pricing strategies for speculative purposes.

High and low price policy.

Each of the above strategies can be associated with high or low prices.

The use of a high price policy is justified if:

the product is unique or reliably protected by patents;
the product is difficult to develop or produce;
price is not a decisive factor for buyers of this product;
market size is too small to attract competitors;
it takes a lot of effort to train potential buyers to use this product;
The company has limited financial sources and is unable to find additional funds.

The use of a low price policy is recommended in conditions opposite to those indicated. This does not mean that you must choose one or another policy if one of these conditions prevails, but rather that if some of the above conditions exist, then it is worth considering the possibility of applying an appropriate pricing policy.

For example, if a company has limited financial capabilities, then it is worth considering the option of a high price policy, since low prices in this case will not bring enough profit for the development of the company. However, a high price may too quickly attract competitors, with whom it will be difficult to fight due to insufficient financial support. A thorough study of the situation is required to solve this problem.

Choosing a Pricing Strategy

Pricing strategy is the choice by an enterprise of the possible dynamics of changes in the base price of a product in market conditions that best corresponds to the purpose of the enterprise.

On the one hand, the pricing strategy acts as a condition that determines the positioning of the product in the market; on the other hand, it is a function formed under the influence of a number of factors, which are:

product life cycle stages;
novelty of the product;
combination of price and product quality;
market structure and the company’s place in the market;
competitiveness of the product.

The listed factors establish only a general framework for its formation. In practice, each of the factors and the strategies they determine must be considered taking into account the reputation of the enterprise, product distribution, and advertising.

Choosing a strategy depending on the stage of the product life cycle.

Under the influence of this factor, the pricing strategy, as well as the marketing strategy as a whole, changes. At the implementation stage, four types of strategy are distinguished within the pricing policy of the enterprise. During the growth stage, competition usually intensifies. In this situation, enterprises strive to attract independent sales agents to their side and organize their own sales channels. Prices usually do not change. Enterprises are trying to maintain rapid sales growth, for which they: improve, modernize the product; enter new market segments with modified products; enhance advertising (provoke repeat purchases). At the maturity stage, the sales volume of the product stabilizes, and regular customers emerge. At the saturation stage, sales are completely stabilized and supported by repeated purchases; Of particular importance is the search for new market segments, new customers and opportunities for new use of goods by regular customers. To prevent the stage of decline, measures are taken to “encourage” sales: the product is modified, its quality is improved. It is possible to reduce the price to make the product accessible to a wider audience of buyers.

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Marketing Goal- profit maximization.

Typical application conditions:

buyers- attracted by massive promising advertising; price-insensitive target market segment; innovators or snobs who want to own the latest or trendiest product;
product- a fundamentally new product that does not have a basis for comparison, or a product of high demand, inelastic demand, a patented product, a product of high and constantly increasing (in order to protect production from competitors) quality, with a short life cycle;
firm- is known and has an image of high quality or is unknown and conducts an intensive sales promotion campaign at the time of product launch; has competitors who can repeat the life cycle of the product, which will make it difficult to return the investment; the production process has not been developed and costs may exceed the expected level, provided that demand is difficult to estimate and it is risky to forecast market expansion when prices fall; the company does not have the necessary working capital for a large-scale launch of a new product and selling at a high price will allow them to be obtained.

Strategy Advantage- allows you to quickly reimburse marketing expenses and free up capital; if the market “accepts” a product at a high price, the prospects for the product are good: it is easier to reduce the price than to increase it.

Lack of Strategy- a high price attracts competitors, not giving the company time to gain a foothold in the market.

Example. The Odintsovo confectionery factory “Korkunov” released its first products only 8 years ago, but has already managed to take a worthy position in the chocolate candy market against the backdrop of such eminent competitors as Nestle and Red October. There are several reasons for this success. To begin with, the company was very lucky with the timing of its entry into the market. Before the August crisis of 1998, the domestic niche of chocolates that Korkunov claimed was occupied by foreign companies. But, frightened by the crisis, they left the Russian market. Korkunov’s products turned out to be the only ones in the expensive segment. In addition, there were no registered brands on the Russian market. The inscription “Korkunov” on the boxes of chocolates sharply distinguished Odintsovo’s products from the “assortment” of different factories. It was given the image of a non-mass product.

1.2. “Penetration price” strategy - a significant reduction in prices for goods

Marketing Goal- capturing the mass market.

Typical application conditions:

buyer- mass with low or average income, price sensitive, demand for quality is inelastic;
product- wide consumption, recognizable, without substitutes (conditions that provide the possibility of further price increases);
firm- having production facilities capable of satisfying increased (due to low prices) demand, a powerful company with experience and the ability to cope with the problem of rising prices.

Strategy Advantage- reduces the attractiveness of the market for competitors, thereby giving the company an advantage in time to gain a foothold in the market.

Lack of Strategy- there is a serious problem of further increasing prices while maintaining the size of the captured market.

Example. The main principle of the French retail operator Auchan when introducing it to the market is that Auchan should be associated in the minds of the consumer with the best prices. In France, the slogan “Auchan brings down prices” was used, in Russia - “A blow to prices”. The company enters the market with consistently low prices. This principle is unshakable and is not subject to any influence. Prices attract many buyers, which, in turn, ensure high turnover rates and large volumes, due to which bulk purchases are carried out with appropriate discounts and overhead costs are reduced. Prices are falling as a result. The speed of turnover allows, even when setting low markups, to receive enough to recoup investments and accumulate profits. The fact that traders take on part of the production functions themselves also helps save on intermediaries: Auchan has its own bakery and salad preparation workshop.

Varieties:“crowding out price” is such a low price that excludes the entry of competitors into the market.

1.3. “Market average” strategy - release of new products at the industry average price

Marketing Goal

Typical application conditions:

buyer- segment of the target market with an average income, sensitive to price;
product- wide consumption, standardized, with a normal life cycle;
firm- has industry average production capacity.

Strategy Advantage- relatively calm competitive situation.

Lack of Strategy- difficult identification of goods.

Example. OJSC Samara Fat Plant, having launched new types of margarine on the market several years ago, such as Domashny, Samara Cream, Rosinka, set the average market price for them. It is aimed at the middle-income segment of buyers.

2. PRICE CHANGE STRATEGIES

After the initial prices (set for new products) have been in effect for a long time, it becomes necessary to change them due to changes in market conditions, the stage of the life cycle, or for other reasons.

2.1. The strategy of “stable prices” - unchanged regardless of any change in market circumstances

Marketing Goal- use of the existing situation.

Typical application conditions:

buyer- a regular and respectable, somewhat conservative client, for whom consistency of prices is important;
product- prestigious, expensive;
firm- works in an industry in which frequent and sharp price increases are traditionally considered “indecent”.

Strategy Advantage- high relative profit (per unit of goods).

Lack of Strategy- the company must have a constant reserve to reduce costs, while maintaining the same level of quality if possible.

Example. The American cosmetics company “Clinique” in the Russian market is focused on high-income, respectable customers, for whom it is important not only and not so much the quality of the product, but its price, because... In their circle, the use of the products of this company is an attribute of wealth and success. Therefore, the company has set a relatively high price for the product it produces and strives to keep it at that level.

2.2. “Rolling falling price” or “exhaustion” strategy - a stepwise reduction in prices after saturation of the initially selected segment

Marketing Goal- expansion or capture of the market.

Typical application conditions:

buyer- mass with average income, “imitator”;
product- particularly fashionable or used by opinion leaders;
firm- has the ability to increase production volume and frequent changes in technology.

Strategy Advantage- the company can achieve periodic expansion of the sales market at the expense of buyers with increasingly lower income levels and a corresponding increase in sales volume.

2.3. “Penetrating price growth” strategy - increasing prices after implementing the penetration price strategy

Marketing Goal- use of the existing situation, maintaining the gained market share.

Typical application conditions:

buyer- mass, constant (follower of the brand);
product- recognizable, there are no substitutes;
firm- powerful, has experienced marketers.

Lack of Strategy- difficulties in raising prices after a low level.

Example. Several years ago, the Ravioli concern, when launching a new variety of Raviollo cutlets on the market, offered them to customers at a gift price. “We are not saying that they are tasty, but we suggest you see for yourself. The gift price is not a sale, but an opportunity to try the product at a fixed price,” the advertising poster read. At the same time, the sale of cutlets at this price was limited: no more than two packs were given out.

3. STRATEGIES FOR PRODUCT AND CONSUMER PRICE DIFFERENTIATION

There are several pricing strategies that use product and consumer differentiation as the basis for decision-making.

3.1. Strategy for differentiating prices for related goods

Using a wide range of prices for substitutes, complementary and component products. Marketing purpose This strategy is to encourage consumers to consume.

Typical conditions for applying the strategy:

buyer- with average or high incomes;
product- interconnected consumer goods;
firm- working with a wide range of products.

Advantage of the strategy is the ability to optimize the product portfolio.

There are variants of the strategy of “price differentiation for interrelated goods”:

a) the high price for the most popular product (bait, image product) compensates for the increase in costs for the variety of assortment and the use of low prices for cheap or new goods (used when selling clothing, cosmetics, sweets, souvenirs):

Example. Bestsellers with an annual circulation of 1 to 1.5 million appear on the market only two or three times a year. Thanks to them, the total sales volume increases by 10% in the first months. Such a bestseller was a book about the adventures of Harry Potter. Bestsellers are an unconditional lure product on the book market.

b) the low price of the main product of the range is compensated by inflated prices of complementary goods:

Example. Today, most men prefer to use shaving machines rather than an electric razor. Thus, in St. Petersburg, only 370 thousand representatives of the stronger sex shave with an electric razor, and 930 thousand men use a razor. The fact that shaving machines are so popular is skillfully exploited by their manufacturers. The machines themselves are usually relatively cheap. But the buyer who purchased the machine is forced to buy blades compatible with it at an inflated price. For example, at the time of sale of the Gillette Mach3 Turbo machine at a wholesale price of 206 rubles, the cost of 2 Mach3 Turbo shaving cassettes was 133 rubles.

c) release of several versions of the product for segments with different elasticity:

Example. Tariffs for air tickets are highly differentiated. For example, there is a group of normal tariffs (which do not impose any restrictions on transportation). It is divided into First, Business class and full annual economy class fares. Tickets of these fares have their own specifics: they, as a rule, have no restrictions on dates or validity periods, are fully refundable and can be freely changed dates and routes.

d) bundling complementary or independent goods into a set at a preferential price (lower than the selling prices of individual goods):

Voluntary bundling: purchasing a perfume gift set will cost less than purchasing all its components separately.
Forced binding: when selling an aircraft, package pricing is used, taking into account prices for engineering and personnel training.

3.2. Price Line Strategy

Using sharp price differentiation for assorted types of goods. Marketing goal of the strategy- creating a buyer’s perception of the fundamental difference in quality, taking into account the thresholds of their price sensitivity.

Typical application conditions:

buyer- has high price elasticity of demand;
product- has an assortment and quality that is difficult for the consumer to unambiguously determine;
firm- has an experienced marketer and the ability to conduct expensive research.

Strategy Advantage- optimization of the product portfolio.

Lack of Strategy- it is difficult to determine the psychological price barrier.

Psychological price barriers determine the range of “price confidence.” Setting prices at a low threshold raises doubts about the qualitative imperfection of the product; at a high limit, it raises doubts about the necessity of purchasing. As a rule, a company works with goods of a certain level of quality (for example, average) in an appropriate price range. The marketer must find price intervals in this range within which demand does not change when prices change (psychological inelasticity of demand with respect to price).

3.3. “Price discrimination” strategy

Selling the same product to different customers at different prices or providing price benefits to some customers. A prerequisite for application is the impossibility of moving goods freely or without additional costs from a “cheap” market to an “expensive” one (geographical, social isolation).

Typical application conditions:

buyer- a regular customer, easily identified, the elasticity of demand varies significantly among different consumers;
product- unique, without equivalent substitutes;
firm- a real or imaginary (in the minds of consumers) monopolist.

Strategy Advantage- optimization of demand in real conditions.

Varieties of the “price discrimination” strategy: a) benefits for regular partners, franchisees (for the purpose of introduction into intermediary structures)

Example. The 1C company has three categories of intermediaries: dealers, permanent partners (franchisees) and distributors. They are provided with discriminatory discounts from the recommended end-user price of 50%, 55% and 60% respectively.

b) different prices depending on the time of use, type of consumer (Segment pricing)

Example. Mosenergo OJSC provides electricity to individual users and organizations at different prices.

To successfully implement this pricing strategy, manufacturers must provide the ability to cost-effectively change product design and construction to meet the needs of different consumer groups.

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Skimming strategy

Skimming strategy

Skimming is an alternative to market entry pricing strategy. The seller makes a profit by launching an expensive product on the market, intended for those market segments that value a differentiated product and are willing to pay above face value for it. After the hype caused by the product in this segment subsides, the company offers a cheaper model of the product, aimed at segments that are not indifferent to quality, but do not want to pay too much money for it. When sales in this segment begin to decline, the company introduces an even cheaper model to the market. By rotating market segment targeting, positioning, and skimming tactics, a company can significantly increase profits through the added value of differentiated products. This smart strategy helps the seller avoid the loss of selling a new product at a low initial price to the buyers who are most interested in the product, and then helps sell the product to those who do not value its differentiation enough to pay dearly for it. This pricing strategy is used to promote many new technologies.

For example, in 1963-1977. Polaroid offered six camera models, ranging from the 100 at $164.95 to the Super Shooter at $25. Each new model was changed towards simplification, and innovations in the development and production of goods made it possible to significantly reduce production costs. The main distinguishing feature of the product - instant color photography - was common to all models. If we take the dollar exchange rate unchanged, then the latest model was less than a tenth of the price of the initial model. Polaroid strictly controlled the market because the main feature of the product was protected by patent. Kodak did not enter the market with similar products until the mid-1970s, but was later accused of violating the Polaroid patent. So, the additional profit that Polaroid received was made possible thanks to patent protection of the main characteristic of the product, as well as the consistent implementation of a targeting and positioning strategy, and the pricing tactics of “cream skimming” significantly increased these profits.

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This pricing strategy can be used by a company introducing a new product to the market that has virtually no analogues, so that it is not threatened by competition. In other words, a small business can use a skimming strategy if it has a unique and quite valuable product from the point of view of consumers, for which they are willing to pay a high price. This strategy is also appropriate in a situation where a company has a patent on a product so that only it can authorize its release, or if the product is so unique or complex that it is difficult to copy. This strategy brings high profits due to the fact that the price of the product far exceeds the cost of its production. The main disadvantage of this pricing strategy is that it draws the product to the attention of competitors, who may try to copy it or release a cheaper substitute.

Pricing strategy for market penetration

Instead of setting a high price for a product, SMEs can charge a low initial price for it to quickly penetrate the market. Thus, this pricing strategy is the opposite of skimming strategy, although both are used when introducing a new product into the market. This strategy is used when many companies sell the same product in the market, i.e. access to the market is difficult due to strong competition. In such a situation, a company sets a price lower than the market price for its product in order to overcome competition (Thompson, 1999). In other words, the company breaks into the market and quickly achieves high sales volumes. This reduces a competitor's net profit to such an extent that it may cause them to refuse to enter the market with the same product.

Discount Pricing Strategy

In some cases, small businesses may reduce the price of a product due to damage or poor sales. Small business managers use discounts to encourage customers to snap up a product before the season ends (or expires). There are a variety of discount tactics: cash discounts, volume discounts, seasonal discounts, and additional purchase (or gift) bonuses. Examples include Christmas discounts and summer sales. Establishing a price scale

Pricing is a pricing strategy used by most retailers where they group similar products into several categories within a specific price range. Products in each category are similar in quality, cost, appearance, or other characteristics. For example, some flower shops have a price scale for flowers, which makes it easier for the buyer to choose what he wants and at the price he is willing to pay. Most products within the price scale are categorized as good, superior or superior quality. The strategy is based on the fact that consumers buy goods for different purposes and of different quality (for example, a tablecloth can be purchased as a gift, or for holiday occasions, or for everyday use).

If SMEs neglect this pricing strategy, they risk missing out on those who would have purchased the product at the desired price but were unable to find it.

Pricing to attract consumers

A pricing strategy to attract consumers involves reducing the regular price of an in-demand product to attract more customers (Zimmerer and Scarborough, 2002). As part of this strategy, small businesses temporarily price a number of their products below the market price. Discounts should be made only on popular products - those that are invariably in demand, the price of which is known, which allows the consumer to immediately evaluate the opportunity to save on their purchase. For example, supermarkets reduce the prices of some of their products to attract customers, hoping that they will also buy other products that are already sold at the regular price.

Geographic pricing

If SMEs sell their products to different geographic regions, they can use a geographic pricing strategy, i.e. including shipping costs (Docters, 1997). The simplest method of pricing based on geography is zoning, when a company divides its market into several zones based on distance from the production plant and sets its own price for each zone. Let's assume that a small manufacturer of power tools located in Leeds serves the Yorkshire area. He sells the same product at different prices in Leeds and Sheffield (the price of the product in Sheffield is of course higher because it takes into account the transport costs of getting the product from Leeds to Sheffield).

One of the most common geographic pricing tactics is to set a price that takes into account all transportation costs to deliver the product.

Using fractional prices

When using fractional prices, SMEs take into account the psychological factor and cost-saving considerations that buyers come with. A fractional price is a price expressed as a non-round number ending in an odd number, such as ?9.95; ?49.95. Despite the completely insignificant difference between the actual and fractional prices, the latter attracts the buyer and persuades him to decide to buy. For example, if a camera is sold at ?99.95 rather than ?100, the actual difference is only 5p, but the psychological difference is much larger, since the first price is perceived as "99-something" and the second as " as many as a hundred!”

Price is not the main thing

In some industries, the quality of a product is infinitely more important than its price. In these cases, the seller may charge a price much higher than the normal price level. For example, a famous lawyer or doctor may value their services much more than their less famous colleagues. Another example is the sale of expensive cars or precious stone jewelry. Here, a very high price only makes the product even more desirable and valuable in the eyes of the buyer.