Top 3 Marketing Pricing Strategies
When it comes to marketing of any type, pricing is one of the most important components. From your product (or service) to your promotional elements, from positioning and target audience to reachability and community involvement, pricing is essential for creating a successful business plan. With such an important role in every business plan, it’s about time marketers did a better job of getting the price right on their product or service. In this article, educator Jonathan Osler San Francisco provides 3 critical pricing strategies that will help you make sure your prices are competitive, effective, and profitable.
1. Positioning Pricing
This, according to marketing educator Osler, is the most important strategy. It’s all about ensuring your product (or service) differentiates itself from the competition in consumers’ eyes. There are three ways to do this – Quality, Service, and Price. By focusing on one of these three methods, you can position your product or service in the minds of your target market in a much more effective way. This strategy will help you avoid direct competition with your competitors and make your product or service stand out from the crowd. It’s what will differentiate you from the rest of the pack.
2. Value Pricing
This is all about knowing how much value your product or service provides to consumers and how this value meets their needs. If you know this, you know how to price your product to make people feel they are getting a great value for their money. Jonathan Osler San Francisco recommends that you find out your customers’ needs and wants and keep track of how your product meets those needs and wants. Then you can price according to the value that your product provides.
Particularly effective with service providers, this pricing method is all about making sure your clients feel they are getting great value for the money they pay. You can accomplish this by adding extra services, providing benefits that other companies don’t offer, or even a money-back guarantee. This strategy may require a little investment on your part (i.e., setting up a premium support line), but it should pay off in the long run.
3. Economy Pricing
While positioning pricing is the most important strategy to get right, it’s not always the most effective. For example, a company that makes very high-quality products may choose to lower its prices to make more money. This is where economic pricing comes in. Economized pricing refers to lowering your prices for a certain period as part of a strategy to increase sales volume. It’s well-known that sales will increase when products are sold at downward price movement. What’s not so well known is that economic pricing increases your profit margins.
When you use these three pricing strategies to position your product or service, it won’t matter if you can’t afford to put it out at a high price. You’ll have developed your market and gained loyalty with that low starting cost. When you start to change your prices, people will be waiting for it. You’ll have created a sense of value that will have people coming back for more – at higher and higher prices. Your marketing price strategies should be part of every business plan because they are the strongest way to build a successful business model.