How to price a product or service?

How to price a product or service?

I often find that my digital marketing students overlook that pricing It is one of the marketing variables that most influences sales of a product, and are unable to properly fix the price of a service or a product. Let's see How to price a product or service?

This article aims to help establish the correct price of any product or service.

  1. Pricing by cost + margin. That is, calculate what it costs to provide a service or what it cost to create a product and add the margin necessary to achieve the expected return. This is the only way to fix the prices my students occurs, and not bad! But it can not be the only one. We must weigh other variables.
  2. Pricing as competition. The prices of our competitors should be considered as a reference and we must fix our depending on whether we want to position ourselves above, or below. This variable depends not only on the profitability of the project but also has a strong effect on our brand image.
  3. Pricing depending on how much demand endures. This form of pricing always amazes students and instead is one of the most commonly used, especially for services. It is to set a price based on the parameters 1 and 2, and plunge up regularly to see if orders keep coming. By the time we notice that slow, we have probably reached the "fair" price received by our customers.
  4. Pricing according to the life cycle of a product. A product or service should not have the same price when it is born and we want people to know that in full operation, or when it is uncatalogs and publish it in our "bargain list".

We should consider these four variables every time you set a price.

There is a fifth variable which is a bit dangerous but it may make sense in certain cases:

  • Pricing according to the distribution channel. That is, for some customers have a price and another price for others, depending on the distribution channel for arriving and type of customer. This fifth variable is useful when you are already well established and well handle a pricing strategy. I do not recommend to start a business or making a business plan ... better focus on the previous 4.

Well, I hope this information has been helpful and that from now know how to price a product or a service, and when you have to make business plans, you calculate either prices or at least make a little more rigor.

We're going talking

A hug.

2 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *