Do You Have an Effective Pricing Strategy?
Our past couple of blogs have addressed the need for defining your 4 P's of marketing. The first "P" discussed in our last blog was the "Product" (or service) "P".
As mentioned in our previous blog, the 4 P's of marketing are:
- Product/Service
- Pricing
- Promotion
- Placement/Positioning
Let's discuss the second P, "Pricing".
This is a very important "P" of your marketing plan. Price your product/service too high and no one will buy it. Price it too low and no one will think it has value, or worse yet, they may think it is not a quality product or service.
Avoid pricing pitfalls by asking some questions:
- What is the competition charging for this? Competitive shop if you need.
- What is the perceived value of this product/service?
- What are some pricing strategies I can use to encourage repeat business?
- Can it be packaged with another product or service to encourage add-on sales?
- Should I offer discounts? If so, how will they work?
- Will my price be competitive and offer me a good profit margin?
Pricing strategy is not as simple as setting the price you want to get for your product/service. As in the product "P", market research in the form of competitive shops, surveys, focus groups, etc. may be required.
When developing a pricing strategy, work with someone who understands it well.
