Which pricing strategy aims to set prices based on consumer demand?

The pricing strategy that aims to set prices based on consumer demand is demand-oriented pricing. This approach takes into account how much consumers are willing to pay for a product or service and adjusts prices accordingly. It is grounded in the principles of supply and demand, meaning that when demand is high, prices can be set higher, and when demand is low, prices might be lowered to encourage sales. This strategy is crucial in maximizing revenue and ensuring that the business is responsive to market conditions and consumer behavior.

Premium pricing, while a relevant strategy, focuses on setting prices higher to create an image of exclusivity and quality, rather than directly responding to fluctuating consumer demand. Value pricing emphasizes offering prices based on perceived value rather than pure demand, which may not align with actual market dynamics. Psychological pricing seeks to influence consumer perception and behavior—such as pricing something at $9.99 instead of $10—but does not specifically account for varying levels of demand. Thus, demand-oriented pricing is the most fitting choice for accurately setting prices based on how consumer demand influences market conditions.