Determining the price of a product or service is not trivial. Incorrect decisions can result in the hard work of the business we are building. Knowledge Business Blueprint can help you know more about marketing and sales. Your digital marketing must give many benefits regarding the business type that you are running.
There are various ways to set prices in the business. There is no similar formula that can be applied in every type of product, business model, and target market. In determining prices, the core factors such as the intended target market, prices determined by competitors, and the relationship between quality and price are important considerations.
There are two important points that must be considered. First, if you set the price too low, you will lose the opportunity to make a profit. Prices that are too low will also affect production activities. Many entrepreneurs apply a low price strategy so that their products/services will be of interest to many consumers so it is expected to increase sales volume. However, low prices are not necessarily perceived by consumers at “cheap” prices.
The second point, if determining the price is too high, then consumers who are price sensitive will leave our products and choose competing products. The ability of the purchasing power of the intended customer is important in determining the price of your product. For this reason, the surveyor to find out what prices are considered reasonable needs to be done.
In determining prices, good companies will use various tools and factors to measure consumers’ abilities. The more you know the condition of the intended customer, the more you will know the selling price that can be pegged. Conducting demographic based surveys and what items are commonly purchased is a type of research that can help give an idea of what prices should be determined.