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Summary: Pricing a new product depends on the conditions of the market and competitors' prices. Price a product with tips from a marketing executive in this free video on marketing and advertising.
Peggy Collins is a dynamic marketing executive who knows the importance of making an impression. Over her two decades in the media, an entrepreneurial spirit and a common-sense...read more
"You're ready to rock, can't wait to hit the streets with your new product or service, but what should you charge? Hello, I'm Peggy Collins and I'm here to help you price your product. It's often said that the right price for anything is what the customer will pay. But that's really oversimplifying a bit. You want to evaluate the market place conditions and establish a profitable but competitive pricing structure. The place to start is to research your competitors, not just prices but what they offer their customers. You may choose to be the low price leader but you want that to be a deliberate decision, a marketing strategy you can live with long term. If so, claim it. Own the position in the pecking order. Promote it and make it work for you. If you can add value for your offerings or packaged products and services, you can also build on that in a competitive situation. If in doubt about pricing and you're unable to find out about competitors rates, the Internet can be a valuable resource. You may find lots of information, competitors in other parts of the country to compare or even blogs that address pricing in your particular industry, or networks and forums that allow you to exchange ideas with other business owners. A key piece of advice would be, do your homework. It's always better to set prices a bit high than too low, as you can always reduce prices or offer promotional discounts to stimulate sales. It's much more difficult to go back and raise prices. So you can get stuck in the bargain basement and have to live with lower profits. I'm big on packaging your products and services to create pricing advantages and keep new projects in the funnel. There are economies to be enjoyed by both you and the customer. Bundled services and packaged discounts serve two purposes. They allow your customer to save money but they also allow you to sell more one product or service at a time; guaranteeing you a regular flow of work and more consistent revenue for your business. For example if you sell apparel, you might discount the shoes or jewelry to match, if they purchase both at the same time. The bonus here is they look well coordinated and represent your store in the best light, and they tell their friends where they bought the great outfit. If you sell services, like photography, you might offer a discount on the larger size photos. Or if they want a child's portrait,you may get additional work by offering a family portrait or a second child in the same sitting. The customer saves money, you save time and make more money in the same customer transaction. If all else fails, research can help. Survey your customers or potential client to determine what the product or the service you provide is worth to them. It's all about value really. You might be surprised. They may set values higher than you imagine and that's an indicator, you might be under pricing. Invest some time on this aspect of your business. Ultimately, your product is worth whatever a customer is willing to pay for it. That's always the right price. These are just a few tips on how to price your product. Wishing you good luck and good business, I'm Peggy Collins."
eHow Article: How to Price Your Product
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