As a small business entity now finding it way into the larger market space, do I have to start with high pricing and if so what parameters can I vary affect my pricing ?
Question you need to address are?what type of product and industry does it belong? Is the market competitive? what is the price of the product in that market/industry? Review pricing strategies and pricing models for the product and industry you belong
Thank you for this information.
It’s complicated, if you enter the market with a low price because of competition
You won’t be able to break even
Readjusting to right price would be difficult because your customers will not cooperate initially
Changing price often is not healthy to businesses
So do your home work, price rightly from the beginning.
You are a legend. This is very eye opening
I think there are formulas for this but what i did was calculate the cost of production per unit and i added abt 30% as my profit. This works for me as my products are not luxury items. I dont think it would work for luxury items. @CLEMENT_ADU-ADDAE
you know I am into innovative and environmental friendly ways of building, so from design drawings and construction…pricing is very critical for me…if I price low I am running at a lost if I price high, I am afraid I might lose my clients
The first factor to consider is Cost per unit of the product, secondly you consider Profit cos that’s why you are in business, then you also consider the Market such that you identify your customers and also know the level of demand for your product, you will also need to consider your Competitors and you might want to consider your Positional Orientation( i.e your location).
Thanks Clement. In my opinion, firstly you have to conduct a market survey of your competitors. Secondly, few of the factors to be considered for your pricing are as follows:
- the market environment
- your market segment
- the current market pricing of similar product and closely related products.
- your operational cost of production should be considered too.
Thanks, I am glad it was useful.
Before considering the price. You may choose to extimate the cost of Production per unit, the current market price or the value you have added to it.
Cost of production and the level of market competition will help us determine the price of our products.
Consider the following; what are the prices of building materials and at what price are your competitors doing it. Once you are able to establish this, it will help you in your pricing atleast.