Pricing plays a pivotal role in the way your business or brand is perceived. You want to price your goods or services at just the right level, so they’re not priced too high or too low. Here are some factors to consider before setting a price:
- Start by researching the standard prices in your industry. This will give you a basis to compare your pricing with that of your competitors, especially those in close proximity.
- If your product or service is new on the market, consider pricing it at a higher rate. Many people connect price with quality, and if they have no recollection of this product or service, you may have an opportunity to establish the price from the time that your product hits the market. Keep in mind that if the price ends up being too high, you can always reduce it and use it as a marketing tool for your potential clients.
- Another thing to consider is the actual “need” for the product or service you’re offering. Depending on demand, you may have more control over pricing. This “need-based” type of business can be more competitive; it may take a little longer to set the correct pricing for luxury products or services.
- When economic times are tough, many companies consider whether to reduce their prices. Keep in mind that reducing the price after your product has already entered the market may encourage customers to question the actual “fair” price of the product. And reducing the price during an economic slump only to increase it once the economy gets better may create negative connotations about your product or service. You have other options to compensate your loyal customers and bring in new ones such as offering one-time specials or providing coupons.
Price is only one of the four factors in how well a product or service sells. Stay tuned in the next few weeks as we review the other three P’s of marketing.
Let Zions Bank’s Business Resource Center assist you with your business needs. Call us for a free appointment at 801-594-8245. We are open Monday through Friday from 9 a.m. to 5 p.m. Beth Holbrook can be reached at email@example.com.