How could you price your products ?

There are many business owners who got struggling with pricing, they do not know how to price them properly!

There are 3 steps to price your product more effectively:

Step1:

Estimate if your customers are price sensitive

a. If you increase your price, will your customers drop a lot?

b. If you decrease your price, will your customers increase a lot? If you said yes to both of these questions, then your customers are price sensitive which means you need to be careful about raising your prices by too much.

Step2:

Choose your pricing strategy

a. Value based – you set the price on what you think customers value your product, this is great for luxury products.

b. Cost + – you set the price based on the cost of your product plus a margin that you set. c. Competition pricing – you set the price based on what the competition prices their products at. This is a good strategy if you have a strong value proposition (see chapter 3) because you will then compete on value not price.

Step 3:

Set your price

a. You now know if your customers are price sensitive, you’ve chosen a strategy, now is the time to set a price. Remember, you can always change it, if you find it’s not quite right.