Author: Hannelore Tontsch
In the past, prices were built on natural needs, rather than on the demand of the market. Therefore it was easy selling and practised everywhere with high margins.
And these days ? A pricing strategy is one of the most important parts of managing any business – But how could we set a price?
Cost versus value
If you choose a cost-based pricing structure, decide on the gross profit you would like to make on top of the amount the item cost.
Is your business less fixated on cost and more concerned with the benefits a customer will receive from your service, consider a value-based model of the five C’s.
- Comprehend the customers needs & their sustainability
- Create value in your services
- Communicate the unique value
- Convince your customers of your services
- Capture the value with appropriate price matrics and fences
(http://www.journalofaccountancy.com/Issues/2009/Jun/20091530.htm)
Differentiation or Standardization
Find some good reasons for structural factors of International Pricing. With these facts you can decide for your company or your product whether it is worth to have a global standardized price strategy or if you should differentiate.
Main aspects
- Build up a keen understanding of your marketplace
- Create a need for your product/services
- Research your competitor’s prices and keep abreast of promotions or special deals that resonate with customers
- Stay true to your value proposition and your clients are more likely to respect the services you provide
By doing research, understanding your target market and forming a suitable pricing strategy around feedback and results, you can establish the ideal pricing scheme for products and services that your business offers.
Does your company keep up on a price strategy? What is key aspect in line with your business goals?