EFFECTIVE WAYS TO PRICE YOUR PRODUCTS
Pricing is the process where the business sets the price of the product by considering the source of the goods, manufacturing cost, market condition, market place and quality of the product. When the price of the product is too high, customer ignores the product whereas the price of the product is too low will make the customer to consider as poor product. An optimal price is set which yields the profit maximising price. The article will let you know the clear factors on pricing the products.
KNOW THE MARKET
The only way to find out the price is to finalise how much a customer is capable to pay and how much competitors price the product. On making the clear report, then you can decide to match up the price or beat them. Directly matching the cost will lead to cause problems. Once preparing the clear direct and indirect cost you can make the conclusion.
CHOOSE THE BEST PRICING TECHNIQUE
Value based pricing is one of the pricing methods which determines the value of your product to match customers price to your product. Analyse the strategy which approach will give a better result in pricing your product before making the calculation.
WORK OUT YOUR COST
On including all the money spent in developing the product which also includes in source of the product, rent, materials, and packaging etc. On calculating the variable cost and finding the percentage of the fixed cost. Dividing the total cost by volume to attain the unit cost price.
SET A VALUE BASED PRICE
First you need to know the market price of the products to fix the actual value cost. The value based price may differ from the market price which includes all the variable cost to develop the product.
ADDITIONAL INFLUENCE ON PRICE
On charging the value added tax may create margin modest on some product to develop higher margin sale in order to fix the static value cost of the product. The price may vary due to different territories depends upon the value of the product.
KEEP ON YOUR TOES
The prices of the product can’t be fixed same for long period of time. The cost may change due to customer and competitors where you need to carry on whatever the price lie in the market. There should be regular conversation with the customers to make the price a favourable one.