OnDemand WTP Pricing Research

Price: Feel the Power | AgilityWorks

So how should price be optimised? Answering these three questions would be a good start:

1. Where’s the focus?
Fundamentally a company can grow profit either by increasing market share or by increasing margin: both of which are difficult to do simultaneously at the best of times, let alone in the current market. There is a fine balance between volume and profit growth, with a trade-off between the two: growing share through price cutting will only decrease margins, potentially leading to a “price war” and category devaluation, benefiting only the consumer. For an established brand therefore the focus should be on maintaining and driving margin.

2. What’s it worth?
Deciding how you price your product is more complicated than it may first appear. There are a huge number of factors to be considered, not least what consumers are willing to pay? Are you a leader or a secondary brand in your category? What is your main competitors’, and therefore the consumers’ benchmark, price? Does your price cover your costs? What happens when your costs go up? Understanding and answering these questions, particularly for NPD, are critical to pricing correctly.

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Price: Feel the Power.

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