Pricing in Business 1(Success in Business Series)
Ever heard of the phrase “reduce your price to attract customers?
Well as a business that’s just starting out, lots of unsolicited advice is bound to come to you and one of them is the issue of pricing.
Before I proceed, I like to advise you against the statement above.
Pricing your product below its worth isn’t a smart business move.
You can decide to sell or offer a service at a much lower rate for the sake of turnover but note that people who do this do not eliminate their entire profit.
In fact, the customer you are trying to retain may not stay, because once you are ready to go back up to your original price, they may feel disappointed or may feel you are trying to cheat them as they will be expecting you to charge them exactly like the other time.
So it’s great to get your pricing right from the beginning as this will foster a trustworthy relationship between you and your client.
What’s pricing you may ask:
Pricing simply refers to the amount you have decided to sell your product at. The amount of money that you charge for your product.
Taking the time to get your product pricing right can act as a growth lever.
One needs product pricing strategies.
Product pricing strategy helps you to determine what the amount should be. These strategies include:
– Value-based pricing
– Competitive pricing
– Dynamic pricing
– Economic pricing
Having an effective pricing strategy helps build trust with your customers.
When pricing, you have to consider a lot of things.
For example, a fashion designer making an outfit for a client has to consider the following before proceeding to give the price;
– Cost of production
-Transportation
-Cost of tools and depreciation cost
-Profit
-Labour etc
A person who deals in buying and selling will have to put into consideration all he spent in the process of getting the goods, the market value of that product, etc before pricing those goods.
@ Esther Edidiong
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