What the product price is based on and how to regulate it

Do you want to bring a new product to the market, but do not know its price? How to set the price that won’t frighten the consumers and cause shock in competitors? Find out what the pricing begins from and how not to resort to dumping at every opportunity.

Finding the right price

There is no single recipe for determining the price. Everything depends on the goals set by the company, as well as on the cost of goods and the size of the companys profits.

How to choose the right price? According to the buy cheap essays service, there are three main approaches:

Costly. At its core, all your costs for the production and sale of products.
Focused on the potential consumer. The approach, in which you rely on demand for what price customers are willing to buy a product, given the useful properties of your product.
Price-oriented competitors. In this case, pay attention to the quality of their products. Comparing, you can determine whether your product is superior to competitors, at the same level or inferior. This will determine your price.

No extremes

If you have decided on goals and strategies, start looking for a middle ground.

Analyze the situation on the market. Find out who is in the lead and who is new. Examine the demand for your product.
Look what the competitors are offering. So, you determined all the advantages of your product, you saw what the market is rich in. It remains to answer the question: high or low price?
Remember that only companies with a unique offer or a well-promoted brand can afford the highest price in the market.

Do not rush

If you brought a product to the market, but while it is not prestigious in the eyes of buyers, it’s advisable not to rush to increase the cost. Customers will not understand such a sharp jump. You need to begin working on raising the price gradually. It may take several years before you reach a certain price level.

In the event that your product is already successful and you have a well-developed brand, know that the buyer is willing to pay for quality and status. So, its time to think about the policy of a smooth price increase.

No dumping

Dumping is an artificial reduction in the price of a product or service. Please note that dumping will only happen in two cases:

If your company occupies a leading position in the market and it has a safety cushion in the form of additional business.
If you have created a unique manufacturing technology that allows you to minimize the costs of the company.

And remember – when you lower the price, there will always be someone who will reduce it twice, or even three times. And the most negative phenomenon that can only be on the market is price war. Never get involved in it.

The best thing you can do in terms of dumping is to find a certain niche in the market or a group of loyal customers and offer them special terms of purchase.

Offering discounts

In the hope of quickly attracting consumers to their products, some enterprises practice spontaneous distribution of discounts. This can scare off customers. After all, the first question that they will have is if you have a bad product.

If you want to win the trust of buyers, then think up an excuse to give a discount. For example, a special price for women, we give bonuses to birthday people, etc.

Do not forget that by lowering the price of the product, you attract so-called discount catchers. They do not care who to buy from, and they are unlikely to become your regular customers.

Is it important for you to interest regular customers? Offer them a gift for a purchase or a free sample of products. Whichever approach to pricing you choose, remember that the main thing on the road to success is simple and understandable goals and clear strategies.

If you want to increase profits, think about developing a unique product that has no analogues. If you decide to take over the market, then work on the discount policy and gradually increase the price in the future.

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