Pricing your product or service can be tricky. Setting prices too high can make you lose valuable sales, and setting them too low can make you lose revenue.
Embarking on a new business venture or reevaluating your company’s pricing strategy requires precise agenda for successful planning.
An appropriate pricing strategy is defined by many factors which include:
- Production costs
- Distribution costs
- Competitor offerings
- Market strategies
- Value-added services
- Target consumer base
Pricing Intelligence Strategy
- Price Maximization
- Price skimming
- Competitive pricing
- Penetration pricing
- Psychological pricing
- Value pricing
- Price to position
The primary step towards a pricing strategy is to establish your basic objective for pricing. Just remember that whichever pricing strategy you adopt, it can make or break your business. Hence, you must set your pricing goals first and then move ahead gradually.
Let’s understand a few of the pricing strategies that you can have:
- Price Maximization: This strategy solely aims at generating the greatest revenues for the company. You have to first calculate all the operational costs that will incur and try and minimize the costs to get the maximum output. This kind of strategy is great for a startup.
- Price Skimming: Price skimming is quite an accomplished way of setting your prices too high right from the introductory phase. It specifically targets high-income group consumers who can be trendsetters and can make way for good consumption in the future.
Gradually, you can lower the price to attract a bigger consumer base. From the company’s perspective, price skimming can help you break even faster than any other pricing strategy.
- Competitive Pricing: Competition is growing faster than a speeding bullet in every market. In this scenario, competitive pricing is the most adopted strategy. When it comes to competitive pricing, consumer behavior is the most important criterion.
Beating your competitor by systematic price tracking and monitoring is encompassed in this strategy. WebDataGuru offers the best price monitoring and real-time competitive pricing information.
- Penetration Pricing: Penetration pricing is the exact opposite of price skimming. Starting your product or service with lower prices and gradually increasing to a higher price is the strategy here. To create customer loyalty, you can offer lower prices.
Once you have successfully entered the market, you can increase the price with an existing customer base.
- Psychological Pricing: Now, this can be aided by monitoring competitor pricing with the help of WebDataGuru. For instance, pricing your product 98 cents instead of $1. This kind of pricing focuses on the perceptions of your customers.
Price-sensitive customers are attracted to this kind of pricing strategy. Psychological pricing also includes a call for action quickly like the end of season sales and black Friday discounts. It gives your customers a notion of buying products at a discounted price and boosting your sales all at once.
- Value pricing: Here, you literally give value for money. Your customers are built based on better-quality offerings than your competitors. Value pricing is one of the most important pricing strategies of all.
To have good value-based pricing, you need a better understanding of your target audience’s needs, conflicting points, motivations, driving points, and the brand’s conception in their minds.
- Price to position: A good marketing mix consists of the best product pricing strategy adopted. It can only be achieved with better price positioning. Your company’s customer base is directly reflected in the price positioning of your product.
Nail the best pricing strategy by distinguished analytical tools and close price monitoring services offered by WebDataGuru. We will help you get it right!