//Release price or Launch price
Release price or Launch price 2018-11-19T13:59:15+00:00
release price

Release price

The release price is the price of a product or service that’s being introduced to the market.

Setting a proper release price is essential for a successful product launch. As people are still discovering your product or service, your initial price is a critical factor in how people perceive your offering.


First impressions last. If you charge too little for your product or service, you’re not only losing revenues, but also hurting your brand image. When people get the impression that your product is “cheap”, trying to reverse this impression by raising the price later on can be extremely difficult. A proper launch price is very important when it comes to positioning a newly-launched product or service.

On the other hand, if your release price is too high, your product won’t sell. That’s why coming up with a proper launch price requires extensive research. Using the right tools to do a market price research can be the difference between success and failure when it comes to a product launch. By doing the required research in advance, you’ll spare yourself countless problems that can result from a poorly priced product.



Strategy Matters

Getting the release price right is a task that is deceptively simple. It might seem that setting a release price is as simple as knowing the highest and lowest market prices and charging something that’s reasonably competitive.

However, pricing is something that needs to be coupled with a strategy to provide the best results. Throwing a reasonable price tag on a product might achieve some sales at first. On the long term though, it won’t achieve much of the company’s strategic goals.

When it comes to release pricing strategies, there are so many tried-and-tested ones out there. The right strategy depends mainly on the product that you’re launching and your long and short-term goals. Choosing the right strategy plays a significant role when it comes to a successful product launch.

Is this the first the first product launch for your company? Do you have other products in your lineup that might be indirectly competing with your new product? Do you have an established name in the market? These are some of the questions that you need to answer before you opt for a release price strategy.

Remember that the right release pricing strategy is determined not only by your company’s strategic goals, but also the product that you’re trying to selling. Setting a price for a luxury, niche product is definitely different from setting the price for a cheap, everyday consumer item.



Release Pricing Strategies

There are plenty of pricing strategies that can be used for for a successful product launch. However, setting a price for a completely different product is a much more challenging process. When setting a release price, most companies use one of two strategies, which are penetration pricing and skimming pricing.

Penetration Pricing

As the name suggests, this pricing strategy is used for penetrating a new market. Companies set a low release price to gain a large market share as quickly as possible. By setting charging a low price for a product, companies get more people to start using this product.

As the product has a low price, people will try it over other well-established alternatives that they’re used to. Chances are some of these people will like the product and become long-term customers.

Whether you should use this strategy or not depends on the product that you’re selling. This generally works with consumer products that would appeal to the masses. The trick is to make it known that your release price is a limited-time offer. By doing so, you’ll create a sense of urgency while avoiding customer disappointment when your prices eventually go up.

To find out more about our penetration pricing strategy, check out our in-depth penetration pricing guide.

Skimming Pricing

In the skimming pricing strategy, a high initial price is set with the purpose of “skimming” the market for clients who are willing to spend more to get the product. This strategy is excellent if you’re selling a niche product. By this, we mean a unique and innovative product that isn’t competing in terms of price only.

For similar products, the skimming pricing strategy is definitely recommended, as it allows for the highest profit margins. One thing to keep in mind though when using this strategy is the fact that it isn’t sustainable. You could set a high release price to skim the market, however, you’ll have to lower the price as time goes by.

By doing so, you’ll be able to make the most out of clients who are willing to pay more and pick up additional clients through the product’s lifecycle. A big that’s well-known for using this pricing strategy is Apple. By setting a high release price that is lowered over time, they’re able to get the most out of their products lifecycles.



How can Sniffie help?

Successful release pricing is a process that requires extensive research and close monitoring for both customer and competitor reactions. By researching the market and paying a close attention to how it reacts, you’ll be able to have a successful product release. That’s where Sniffie can help.

With Sniffie’s price monitoring system, you can easily conduct a thorough pre-launch research as well as measure the competitor reactions to your pricing strategy. Check out Sniffie’s features and our service page to find out how Sniffie can help.

Strategy card

Strategic importance (retail) 94
Strategic importance (ecommerce) 94
Ease of use 72
Practical implementation 83

How to use release price

  • Conduct a proper market price research.
  • Understand the highest and the floor of your pricing options.
  • Create a better value proposition than that of your competitors.
  • Set your product launch price price.
  • Analyze the market reaction.
  • Adjust the price if needed.

Used when introducing a new product/service to the market.

  • Give your market price research the time it needs.  
  • Make sure not to underprice. Lowering your prices is always easier than raising them.
  • Have a product lifecycle strategy in mind before you set your price.
  • Follow good industry pricing strategies.