What is Economy Pricing Strategy? Definition, Strategy, and Examples

Are you also looking for a detailed guide on the Economy Pricing Strategy?

If yes, then you’re at the right place

After researching numerous top-level real-life companies, we have figured out the appropriate definition and implementation of the Economy Pricing Strategy. It is a volume-based strategy where companies seek to serve more and more customers at the lowest possible pricing. There are various factors to consider when choosing Economy Pricing. 

From proper definition to the strategy to real-life examples, this article consists of all the essential information about the Economy Pricing Strategy. 

Let’s explore the Economy Pricing Strategy in the real business world!!

What is Economy Pricing?

Economy pricing refers to the lower prices of the products due to their lower production cost. In this strategy, businesses decide their product’s pricing based on their production value because it doesn’t incur any advertising or marketing costs. 

Here, generating profit with the pricing strategy depends upon the volume of products sold. Hence, the more products you sell, the more profit you make. 

Economy Pricing Strategy
Economy Pricing Strategy

Businesses with this strategy become successful only with a long-term vision, even when you have lower overheads and costs than your competitors. It helps you gain a higher market share.

Economy Pricing Definition - "Economy Pricing can be defined as volume-based pricing as you have to sell a higher volume of products at lower prices to generate profit. It doesn't consist of any requirement for advertising and marketing costs."

Economy Pricing Strategy 

Three factors are essential for setting up economic pricing: Production Costs, Profit Margins, and Cost. Production cost defines the cost incurred in its production. Profit margins are the amount required for your business to generate profit. Cost represents the overall or additional cost required to add to its production cost. The difference between the cost & the selling price is called the markup price of the product.

The Economy Pricing strategy is created after summing up all these points. Pricing is generally very low initially, and you need to sell a volume of products to generate the required profit. Thus, you must continuously acquire more customers to grow and sustain the business. 

Economy Pricing Advantages and Disadvantages 

Though this strategy is advantageous for many businesses, it has several disadvantages too. Thus, we have mentioned some of the advantages and disadvantages below: 


Let’s look at some of the genuine advantages of economy pricing.  

Economy Pricing Advantages
Economy Pricing Advantages

Simple to Implement

An economic pricing strategy is comparatively easy to implement in action. It can easily be implemented in any business with low production and marketing costs. It mainly helps larger companies to sell and acquire at a more significant level. However, new companies can also implement this strategy. 

Low-Cost Maintenance 

One of the essential advantages of this strategy is its ability to keep costs low. Because it majorly works on the companies with lower production or marketing prices and saves money. Thus, it saves money to launch even more new products. 

Helps In Acquiring More Customers

Economic pricing makes the companies sell their products at a lower price than the other competitors, as it gives an edge in competitive pricing. It is more focused on reaching a larger volume of customers. Thus, it helps in acquiring more customers. Customers mainly get attracted because of the lower pricing. 

Introduces New Products More Quickly

It is implemented upon the products considered under marketing or advertising. Thus, it allows businesses to produce newer products faster and launch them in the market. Such products are commonly qualitative and fresh. 

Promotes Brand Awareness

Companies mainly implement this strategy for the generic products sold under their name. Thus, it saves you a lot of money that could be spent on maintaining the product’s brand awareness. Instead, it increases the brand awareness of your business. 


Let’s have a look at some of the disadvantages of this strategy despite being so profitable for many businesses.

Economy Pricing Disadvantages
Economy Pricing Disadvantages


Numerous businesses produce local products with this strategy. Thus, it increases competition in the market. Well-known retailers can also compete against you when selling products with loyal customers. 

However, the business or company selling their products or services at the lowest will rule this segment of customers. 

Customer Disloyalty

Though this strategy attracts new customers due to the low pricing, it also doesn’t invoke any feeling of brand loyalty in the customers. Because these customers make their decisions only based on the pricing and discounts, thus, if any other brand came up with lower pricing, they would most likely switch there.  

Low Quality 

This strategy mainly focuses on creating products with power production costs. And it generally leads the products to be of lower quality. Because companies do anything to cut down their costs and produce low-quality products, you can not implement this strategy in each product or service.  

Economy Pricing Company Examples

Various companies are focusing on this strategy. Below, we have mentioned some of the best company examples: 

1. Target’s Up & Up vs Pampers

Target, the biggest big-box retailer company, is one of the excellent economy pricing examples. They have a wide range of food, apparel, and home decor products. Up & Up is also Target’s brand comprising various products, including hand sanitiser, multivitamins, and diapers. 

Up & Up offers a 124-count diaper pack for just $14.99, while Pampers offer an 84-count diaper pack for $26.99. There is a simple gap of $12 and 40 diapers, which makes it evident for the buyers to choose the Up & Up over the Pampers. You would also have noticed that Pamper invests its money in advertising and marketing. At the same time, Up & Up doesn’t do any marketing and cuts that cost. 

Thus, when visiting any store, you will see both products offering different amounts of material at different prices. Most price-oriented people choose Up & Up over any products. 

2. ShopRite’s Bowl & Basket vs Bubly

ShopRite released Bowl & Basket in 2019 as a private-label food and beverage brand. ShopRite and Bubly, both brands, produce sparkling water. Let’s compare both of them. 

Bubly invests much money in its sparkling water marketing and advertising campaign. While on the other hand, ShopRite does not put even a penny into its advertising and marketing campaigns.

Thus, Bubly offers an 8-pack of lime sparkling water at $3.99, while ShopRite offers 12-pack sparkling water at 50 cents less than what Bubly offers. 

3. Singapore Airline Economy Pricing Strategy Examples

Singapore Airlines used to hold a premium position among all the long-haul travellers to Asia, Australia, and New Zealand. But, they have also put their hands in this strategy after seeing the increasing popularity and preference for low-cost flights. 

Singapore Airlines has launched three different airlines to feed more in-between traffic. Therefore, this is how Singapore Airlines benefits both premium travellers and high-volume travellers. It is one of the classic examples of this strategy. 

Final Verdict 

The economy pricing strategy is a volume-based and low-cost strategy. It helps in reaching the volume of customers with the lowest possible production cost. It targets the price-seeking section of the audience at a more significant level. We hope this article helps you know the essentials of this strategy and gives you a detailed look at it to implement in your business. 

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