Pricing of our product
One of the secrets to business is pricing your products properly. It is probably the toughest thing there is to do.
"It is a part art and part science."
There are a variety of different types of pricing strategies in business, unfortunately there is no formula-based approach that suits all types of products, businesses, or markets.One size does not fit all. But do not worry about, here we are!
Pricing your product usually includes considering certain crucial factors as: pinpointing your target customer, tracking how much competitors are charging, and understanding the relationship between quality and price.
Stop freaking out and read our blog - we will help you to meet your business goals in pricing products! We offer you a scheme which you can follow. Let's see essential factors to consider:
1) Know Your Customer
- undertaking some sort of market research is crucial to getting to know
your customer. This type of research can differ from informal surveys of your
existing customer base that you send out in e-mail along with promotions to
expensive research projects. And whether you do not have thousands of
dollars to spend on market research, just simply look at consumers in terms of
a few distinct groups and then figure out which segment you are targeting and
price accordingly.
2) Know Your Competition
- It is also useful to know your competition -- after all, your customer
most likely will, too. Do your competitors offer products comparable to yours?
Does your product have some specific additonal value? is your good of
perceived higher quality? Either you can just use competitors prices as an
initial gauge or you may support a higher price in case your product is somehow
exceptional.
Do not be afraid of communicating with your customers, ask them! Find what
are their deepest desires and fight! Try to find out how your company, your
products and your competition are percieved by the market and beat your
competiton!
3) Know Your Revenue Target
- you should also have a revenue target for how much of a profit you
want your business to make. You should consider costs for producing, marketing,
and selling your product and you can come up with a price per product.
4) Know Your Costs
4) Know Your Costs
- a fundamental target of pricing is that you need to cover your costs and
then factor in a profit. your costs might include the following:
• Your actual product costs, including labor and the costs of marketing and
selling those products.
• All of the operating expenses necessary to own and operate the business.
• The costs associated with borrowing money (debt service costs).
• Your salary as the owner and/or manager of the business.
• A return on the capital you and any other owners or shareholders have
invested.
• Capital for future expansion and replacement of fixed assets as they age.
5) Know Where the Market Is Headed
Is your product still on demand? What are the newest trends on the markets?
What patterns may impact future sales of your products. Also take into account
your competitors and their actions. Will a competitor respond to your
introduction of a new product on the market by engaging your business in a
price war? Also do not forget to take in consideration risk of under and over
pricing!
And finally a short summary for those who prefare to read only conclusions!
How to Price Your Products? Your product price should vary depending on a
number of factors including:
• What the market is willing to pay.
• How your company and product are perceived in the market.
• What your competitors charge.
• Whether the product is "highly visible" and frequently shopped
and compared.
• The estimated volume of product you can sell.
Mainly do not forget to analyze the profitability of your existing
products! You can do more of what works and stop doing what doesn't work. You
can find out which of your existing products are making money and which are
losing money.
We wish you good luck! And see you here next time! Read our blog and crunch your crawings!
We wish you good luck! And see you here next time! Read our blog and crunch your crawings!
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3 comments:
Thank you for the detailed explanation about price setting, but still can you preliminary calculate price for your product? How will different factors influence your pricing? Can you develop the ways to cut costs in order to be more competitive? Good luck and waiting for your tomorrow presentation!
Yeah, in order to calculate the price we went to the stores and looked on similar product prices (carrots in packs) and junk food products....then we calculate our bottom price and top price....We will add our results today;)
Firstly we are sorry for posting our results now. We needed some time to think about our pricing strategy and to choose the best. We revealed part of our secret, not the whole strategy.I hope you will be satisfied.
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