The service for a cheaper price. Advertisement CompetitorBased Pricing If on the other hand youre in a highly competitive market with several different companies offering very similar products then competitorbased pricing may be suitable for you. It allows you to differentiate yourself from the competition and draw customers away from them based on how you position yourself. The danger here is that you let yourself get drawn into price wars that erode or even destroy your profit margins. Thats particularly true if youre up against a large company that can afford to undercut you. I talked about this danger in an earlier tutorial How Your Small Business Can Compete.
With a Larger Competitor Andrew Blackman
Aug Mix and Match Its worth noting that in this tutorial Ive separated the strategies into very distinct sections but in Antigua and Barbuda Business Email List reality you may end up using a blend of different ones. For example you may want to use the costbased method to make sure that youre at least covering your basic costs and making a profit. But then you may do some customer research and realize that you can justify charging a much larger markup than youd planned. You always monitor your competitors prices however and make sure to undercut them at every opportunity.
What’s right for your business depends on
A lot of things including your industry your size and your overall strategy and business plan. Take the time to assess Denmark Phone Number your needs and decide which pricing strategy or combination of pricing strategies is right for you. Conclusion I hope youve enjoyed this overview of pricing strategies. Pricing can be a complicated area of business but with the knowledge youve gained in this tutorial you should be clearer about some of the underlying principles and be ready to choose the right pricing strategy for your business. If you want to learn more take a look at these other pricing tutorials on Envato.
