Episode 17. The fundamentals of pricing strategy, what you need to know for market success Pricing Strategy is a model or method used to establish the best price for a product or service. It helps you choose prices to maximize your objectives, while considering consumer and market demand. Getting pricing right is not easy, price too high and you will not generate many sales, price too low and you are leaving money on the table. Especially when starting out in business your pricing strategies may change as your company grows. You may start with a penetration pricing strategy then move to a profit focus. It is essential that if this is the approach you intend to adopt that you plan ahead and plot the change in strategy in advance, Questions to ask yourself: Do I need an income from my business? How much? And When? Will I borrow money? Seek funding? Or bootstrap my business? What is company’s position in the marketplace? Premium? Mass Market? Your preferred growth curve? Faster growth requires more resources – capital and people Are you in this business for the long haul? Or is this a “proof of concept” business?

You can cater to the rich, and I’ll take the rest; the good Lord made more of them. Kemmons Wilson founder Holiday Inn

People only buy from you for three reasons: You save them time You save them money You make them feel good Understanding the reasons people are, or will be, buying from you will be invaluable in setting your pricing strategy. You may be able to deliver two out of the three. You could save people time and make them feel good. Know your customer’s reasons for buying from you.

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