Price setting


Finding the right balance of offering a service at a price that is right for you and the customer is not always easy to find when you are just getting started. However, over time, an equilibrium will be reached where you realise your niche where clients are either happy to pay a nominal premium for a quality service or otherwise.

smallbusiness.co.uk has some useful hints to review whilst you are setting your strategy:

1. Analyse the position your product holds in the market.

Are your target customers those who are looking for reliability? Has your product already achieved an established image in the eyes of the market? Do buyers view it as good quality, prompt service, stylish, say?

2. Analyse your product.

Are you planning modifications or alterations which could alter its reputation or relative position in the marketplace?

3. Analyse the competition.

How do their products rate against yours? What is the relative price structure in the market?

4. Decide your pricing strategy.

Where in the price range are you going to pitch your price? Is it going to be average for the market, 5% less than the average, 5% above the average or a premium price, 25% above the average?

5. Choose some specific prices.

Estimate volume of sales, profit margin and costs to forecast the level of profits for each price.

6. Choose your price.

7. Are you be able to test market the price in a small area of your market?

This would allow you to gauge customer reactions.

http://www.smallbusiness.co.uk/channels/sales-and-marketing/finding-customers/guides-and-tips/20707/guide-to-setting-prices.thtml

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: