Four pricing mistakes you need to avoid   | Dynamic Business Australia

One: The first mistake entrepreneurs and new businesses make is they often give too little thought to this highly complex matter and the consequences can be dire. Set your prices too low and you are leaving money on the table. Set your prices too high and nobody will buy your product or service. The right price is the maximum the customer or client is willing to pay.

Two: Pricing should be about value – real or perceived. Before setting a price for a product or service, you need to understand what the price indicates to your target customer or client.

Price can indicate quality or value and, subject to having no other information, we look to price first to shed light on the quality. Therefore, products and services that are more expensive are perceived to be better quality, and products and services priced lower are perceived to be of lower quality.

Businesses use price to communicate something about their product or service. They may lower the price to communicate value for money, or raise the price to communicate quality or prestige. Of course, neither of these may be true, but it is a message that the business is trying to communicate.

Pricing also needs to be consistent with the other brand elements. For example, if you are trying to price for exclusivity then the marketing, packaging, sales pitch, etc., need to also reflect the exclusivity of the brand.

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Four pricing mistakes you need to avoid   | Dynamic Business – Small Business Advice – Forums | Dynamic Business Australia.