The losing business to a competitor youve got a very good business. And if you have to have a prayer session before raising the price by then youve got a terrible business. However theres a problem. If you read the marketing textbooks youll hear about dozens of different pricing strategies and it can all be quite overwhelming. But the good news is that most of those different strategies can be group into three main categories costbas customerbas competitorbas In this tutorial youll learn the fundamentals of each approach the pros and cons and situations in which you can use each of them. By the end youll be ready to choose the right strategy for your business giving you a vital competitive ge in a tough marketplace.
Cost Based Pricing Cost based pricing is the
The three main pricing strategies so lets start there. If you want to run a successful business the first thing you need to do Ireland Business Email List is cover your costs. So costbased pricing makes a lot of sense. You add up all the different costs of manufacturing your product or delivering your service and add a markup on top to give you the amount of profit youre aiming for. The advantages of this approach are that its logical easy to understand and it ensures that you at least cover your costs with every product you sell.
Customers may also like it because it makes
Intuitive sense and links the price theyre paying to something tangible. On the other hand looking at cost alone can Colombia Phone Number sometimes make you uncompetitive especially in businesses where your costs early on are quite high. And theres also the chance that your customers would actually be prepared to pay more than just the cost of production plus a markup so you can end up leaving money on the table. How to Calculate and Set CostBased Prices Although it sounds simple enough calculating costs.
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