Another vital aspect of selling your product is about setting the right price. In this section we will go through some helpful for getting this right.
Establish your costs: the first step before considering any pricing strategy is to calculate the costs of producing your product or service. This will include the cost of delivering your product, as well as your total overheads, sales and marketing expenses.
This resource will help you calculate your breakeven price: http://www.business.vic.gov.au/money-profit-and-accounting/pricing/calculate-your-breakeven-point-margin-and-marku (Business Victoria, 2018)
Research your market position: researching where your product fits in the current market will give you a much better understanding on how you should price it. It will also unlock a range of benefits such as how to better target your customers and how to make market forces.
Follow this resource on how to get the most out of market research: https://www.inc.com/guides/2010/05/conducting-competitive-research.html (Inc.com, 2010)
Research your competition: after you have enough information about your own company and its position in the market, it is time to find out more about your competition. Ensure that you have sufficient information on how your competitors price their products and the strategies they use.
Observe the demand and life-cycle of your product: be prepared to change your prices to reflect seasonal demand or changes in the product life cycle. Such strategies may involve ‘price skimming’, when businesses put their prices up when product demand is high and then gradually lower them over time.
Brand and product quality: last and not least, critically evaluate your product and branding to establish whether it has a competitive advantage in the current market. Consider investing into resources into your branding in order to set a premium price.
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Hypercube.co.nz (2017). A Beginners Guide To Strategic Product Pricing. Available at: https://www.hypercube.co.nz/strategic-product-pricing/ [Accessed 31 March 2018]
Business Victoria (2018). Margin, markup and breakeven. Available at: http://www.business.vic.gov.au/money-profit-and-accounting/pricing/calculate-your-breakeven-point-margin-and-markup [Accessed 31 March 2018]
Inc.com (2010). How to Conduct Competitive Research. Available at: https://www.inc.com/guides/2010/05/conducting-competitive-research.html [Accessed 31 March 2018]