OnDemand WTP Pricing Research

Ask SCORE: Skillful pricing brings power | Business in Savannah News

Deciding how to best price a product or service is one of the most fundamental, and for many small business owners, most difficult decisions they must make. A price is the monetary value the marketplace assigns to a product or service. It represents what a willing buyer and a willing seller agree is fair. Thus, the marketplace becomes the impartial judge of an appropriate price. A buyer will not pay more than the perceived benefit derived from the product or service.

Pricing factors

A seller factors in the unit cost to produce the product or offer the service; target profit on the item and market prices for a competitive product or service. In contrast, a buyer’s pricing decision is influenced by different factors. These include tangible qualities such as performance , efficiency, and intangibles such as image, brand identity and whether or not there are acceptable substitutes available. Collectively, these factors create a cost/price bracket in which the seller and the buyer strike a deal.

Understand your competitor’s cost structure, market and business goals. Your pricing strategy should be flexible enough to respond to changes in the business environment and in the seller’s likely pricing needs. Change is inevitable. Successful businesses adapt.

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Ask SCORE: Skillful pricing brings power | BiS | Business in Savannah News.

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