Effective Product Pricing
Posted in PLM Files on July 20th, 2010 by Yvonne_PLM – Be the first to commentPricing is always tricky.
If you want sell something online, pricing could be the single most important decision you will take during your product launch. Competition is fierce and with many alternatives on the internet, you need to be comparable with the competition. But do you?
Conventional wisdom usually mentions Cost Plus, Discounting (loss leaders and the like), Target return pricing based on an ROI you want to acheive and Value-based pricing where your price is based on the value it creates for the customer. The definition of Value based pricing can also include “pay for performance” pricing for services. The important point of conventional pricing wisdom is that the amount that customers pay for your services is directly proportional to how valuable they think your product or service is.
However many business overlook look the importance of the offer in defining the value of the product.
In product launches we spend a lot of time evaluating the offer and working out how we can add value to the existing offer to make it more attractive and justify a higher price to fully maximise the profit when launching products to market. Some of the ways we do this is to enhance the overall value of the offer by adding additional products, services or information. We also take a close look at how the branding is positioned as well as making sure there is credible proof of product performance.
Contact us if you need help in crafting your offer for maximum profitability.
