The Review Newspaper

How to price your product or service?

You are in business, starting a new enterprise. How did you figure out how much to charge for your product or service? It is ultimately a strategic planning question in your business plan. In fact, the pricing of a product or a service is one of the most important aspects of your marketing strategy, which also includes product, promotion, placement (or distribution) and people.

Generally, pricing strategies include the following:

  1. Cost-plus pricing – simply calculating your costs and adding a mark-up;
  2. Competitive pricing – setting a price based on what the competition charges;
  3. Price skimming – setting a high price and lowering it as the market evolves;
  4. Penetration pricing­ – setting a price low to enter a competitive market and raising it later;
  5. Price bundling – combining products and/or services to increase value, and therefore price.

Your pricing strategy should be part of both the “marketing mix” (The 4P strategies: price, product, promotion and placement) and the general business strategy.

If yours is a new company, you must establish yourself in the marketplace. Your pricing strategy will have a huge influence on your customer acquisition skills.

Choose wisely!

 

Benoit Brunette, Project Officer
613-675-4661, ext. 8106 or 613-306-2614
bbrunette@prescott-russell.on.ca


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