OnDemand WTP Pricing Research

Pricing – Science or Art? | independenttribune.com

There are plenty of formulas, theories and spreadsheets out there to help you determine how to set prices for your products and services. You may opt for pricing consistently below your competition. Or you may prefer to ensure that your prices return a minimum profit margin. Perhaps it’s just ‘what feels right’. Or you may use any combination of other factors to drive your pricing strategy.

Here are some pricing strategies you may be familiar with:

Mark-up pricing, which is simply adding a preset profit margin, or percentage, to the cost of the item.

Vendor Pricing, or just using manufacturer suggested retail price (MSRP).

Competitive Pricing, or setting prices relative to the leading competitor’s prices, either above or below.

Psychological Pricing. This involves setting prices to drive the perception of being fair. A common example is prices ending in .99

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Pricing – Science or Art? | Columnists | independenttribune.com.