Pricing your product is one of the most critical steps in getting your business right in the market. Figuring out how much a product is worth and what might be a fair pricing in the market can be quite a tough task for any business. Pricing, unlike what it seems, is a very complex area. Get it right- the profits will just flow in. Get it wrong - your business is going to shut down even before you know it.
Pricing - Basics and More
So what does it take to get your pricing right and increase your likelihood of success? When it comes to pricing, the saying stands true - poor planning leads to poor performance. Pricing of a product sends a lot of messages to your consumers and helps your brand to position itself in the market as well as people's mind.
For instance, you are at a perfume counter and want to buy a gift for your friend. If you are a person who are not very up-to-date with perfume brands, pricing is the only way that you can consider the quality of a brand or whether it's a cheap imitation of a big brand.
Of course, merchandising and packaging helps, but pricing is very important. So here are key questions that you need to ask yourself before setting a price for your product.
- Is your product new in the industry?
- Who is your target audience
- What does your consumers currently use or might compare your product with when they are shopping?
- What are the benefits that you offer with your product?
- Will these benefits make a difference to your consumers and are they willing to change and try your product for these benefits?
- How affordable is your product?
- Who is your competition?
- What price does your competition charge for a product similar to yours?
- How is your product different from your competition’s product?
- Do you see a repeat purchase of your product or is it just a one-time purchase?
- Is there anything consumable attached with your product?
- What kind of risk a consumer might be taking by choosing your product over their usual product?
- Are you offering any guarantee or reassurance?
Answering these above questions will surely help you to understand better where your product stands in the market and how willing your customers might be in trying your product. Pricing also depends upon your targeted audience’s standard of living and their affordability.
Our tool will help you figure out your pricing strategy against other products in the market. Since pricing is a very important factor in the success of your business, it's important that you consider this decision crucial and take your time in making the right choice. Since it's always not possible for you to hire an expert who may or may not be able to give you the right advice, using this tool is the most accurate way to find out an effective pricing strategy.