the importance of dealing with strategic pricing concerns

THE IMPORTANCE OF DEALING WITH STRATEGIC PRICING CONCERNS

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For additional information about Competitive Intelligence please visit www.Intelligence2act.com

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There’s a lot more to pricing products and services than most people realize.

It’s not just about who charges more or less for a product, it’s about need versus want and the perceived value.

Strategic pricing can affect your sales more than you could possibly imagine, and if a business doesn’t take advantage of these strategies they’ll lose out on potential sales.

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There are many different types of pricing strategies for a business to choose from and how effective they will be is often based on the target audience and/or certain demographics.

Learn the following strategies and you’ll be able to sell more and have more control over your business and the revenue it generates than ever before.

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CREAMING Creaming is one way to get a profit from your sales and it involves a premium price point.

While this is effective it requires people to be willing to spend the top amount of money for a product due to perceived quality. It typically can be used only for special order items that are hard to find, but in a rich demographic this pricing strategy often prevails.

Unfortunately, with rough economic times like the world is experiencing today, many companies are avoiding pricing like this unless it is to recuperate the cost of obtaining a rare item.

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COST PLUS PRICING Cost plus pricing would be the most common pricing in retail. You simply decide your markup and then apply that percentage to every product.

Do you want to make 10% profit or maybe 40%? The choice is yours and this strategy only has a few problems.

First, some products you’ll charge more or less for, at times making it unappealing to certain customers. It also means that you’ll have to make exceptions for money products and employ other pricing strategies.

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MARKET ORIENTED PRICING Market oriented pricing has always been a safe way to go as well. Strategic pricing concerns the competition but with market oriented pricing you’ll be able to keep up with them.

Setting your price based on competitors and hopefully just beating their prices will get you more customers. If you raise the price slightly you can try to use the same strategy as Creaming, appealing to the top of the barrel and charging a premium price point.

In this case you can make a profit with fewer customers but like creaming, this strategy can be difficult in tough economic times.

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PRICE FLEXIBILITY STRATEGY The Price flexibility strategy is one of the few pricing strategies that consider the situation of the buyer. Strategic pricing concerns the market and its customers.

When customers are unable to pay full price they often can strike up a deal with you or offer some sort of bargain or trade. Price flexibility strategy allows you to vary the price and keep it flexible from situation to situation. While this strategy can upset some customers if they feel someone else got a sweeter deal than them, in most cases it works wonderfully and will get you business from all sorts of people. You’ll be able to control the market as well since you are the one in the position of power. You’ll control the final offer but you’ll also be able to help your customers by striking a deal on your quality product or service and they’ll become more loyal to your brand.

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Once you’ve dealt with your strategic pricing concerns, and come up with a strategy that works for you, your business is guaranteed to prosper and grow.

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For additional information about Competitive Intelligence please visit www.Intelligence2act.com

the importance of dealing with strategic pricing concerns

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