It can be useful to charge different prices to different customers, e. If money is the bottom line for you, try pushing the limits to see what the market will bear. Remember, how you set the price of the products could be the difference between the success -- or failure -- of your business.
When a product is unique, a value-based price may be a more profitable option for you. Advantages of customer-based pricing You may be able to charge a higher price than your competition if you can show how your product has a unique or innovative quality that is worth more to the customer.
Are they bargain hunters? If your product s can be differentiated through additional features, price them at points that reflect their individual values.
These factors can range from something as simple as long-term weather patterns to laws that may impact future sales of your products. This information could come from phone calls, secret shopping, published data, etc. Design a price range to appeal to a variety of consumer groups: Does your price reflect your product image?
Do your customers buy solely based on price? Know Your Costs A fundamental tenet of pricing is that you need to cover your costs and then factor in a profit. Pricing should be in line with the value of the benefits that your business provides for its customers, while also bearing in mind the prices your competitors charge.
Ask yourself these questions to help you assess your competition. What your competitors charge. What effect will the price change have on the volume of sales? When using competition-based pricing, you still need to cover the costs of producing your product. This type of research can range from informal surveys of your existing customer base that you send out in e-mail along with promotions to the more extensive and potentially expensive research projects undertaken by third party consulting firms.
Be creative by thinking of new ways to sell more to existing customers or to attract new customer groups. You should be able to make these more profitable through lower costs.
Making money means generating enough revenue from selling your products so that you can not only cover your costs, but take a profit and perhaps expand your business. A price break is given to customers who order 10 or more cakes at one time.
Disadvantages of cost-based pricing Cost-based pricing does not take into consideration customer demand, the perceived value of your product or how your product compares to the competition.
How to build a pricing strategy You need to decide whether to use cost-plus or value-based pricing. Once you have a loyal customer base, you should be able to find ways to raise prices later Raising or lowering prices There will be times when you need to change your prices.
Concentrate on building profits rather than cutting prices to build up sales. The best choice depends on your type of business, what influences your customers to buy and the nature of your competition. Planned-profit pricing combines per-unit costs with output projections to calculate the product price.Free Essay: Setting a price for a service or product can be very difficult.
Patients are now checking to see prices on certain non-emergent services before. Pricing a Product. Definition: Before setting a price for your product, you have to know the costs of running your business. If the price for your product or service doesn't cover costs.
Jun 27, · Setting a product price is an art and a science. It is both a business and a personal decision, factoring in how much you need to earn to make a living, along with your values and marketing.
The price you charge for your product or service is one of the most important business decisions you make. Setting a price that is too high or too low will - at best -.
Price immediately differentiates you from your competitors. Learn how to set and get the right prices for your products and services.
Elizabeth Wasserman is editor of Inc.'s technology website, for example offer additional service with your product or is your good of perceived higher quality?
Setting prices .Download