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Your Pricing Strategy Makes a Difference

Do you have a pricing strategy for the products and services your business offers? If you have been pricing your goods based on its cost plus a mark-up, you might want to sit up because you may be selling yourself short.


What your customer will pay for what you offer has little to do with the “cost” per se, but everything to do with the perceived value of the product or service. By adopting a value –based pricing approach, you can price your products or services according to how much the customers value it. And this goes without saying, make sure the value is higher than your cost!


Aside from cost plus markup and value based pricing, other pricing strategies include:⁣⁣

- Competitive pricing – where you use your competitors prices as a benchmark


- Penetration pricing – setting a low price initially as you enter a market and increasing it eventually


⁣- Price skimming – setting a high price and reducing it later⁣⁣


⁣Now, there is no wrong or right pricing strategy, however value-based pricing is likely to be more profitable for you especially if you are a differentiated business offering unique goods or services. That being said, be sure to adopt a pricing strategy that is right for you.

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