Setting prices for your products and services might at first seem simple enough.
Either look at your competitors and charge the same or less or a bit more
Or simply take your COGS (cost of goods ) model and add on the profit you want to make.
However, the area of pricing is not as simple as that if you want to stay in business. As price is not simply an exchange of money BUT js inimiatley tied to the value exchange of your product and brand and the consumer for example.
Set prices too high, and you miss out on valuable sales. Set them too low, and you miss out on valuable revenue.
Thankfully, pricing doesn’t have to be a sacrifice or a shot in the dark.
There are heaps of pricing models and strategies that can help you better understand how to set the right prices for your audience and revenue goals as well as taking into account consumer demand, competitor pricing, and overall market and economic trends.
Abacus Research can help you pull together a strategy that maximises your profit and revenue.
Our pricing studies will help you explore which pricing approach is right for you, at the moment in time. You might want to consider your product adoption life cycle for example and plan to move from say cost-plus pricing for early market entry and then move to skimming pricing as you move into different markets.
Research will also be a significant part of your consideration too. For example what value does your customer place on what you are offering. A consumer purchase process includes a comparison with your competitors and that is not always just price. So you will also need to check your brand sentiment or product sentiment too. Or even check your product adoption strategy.
Thinking about everything that goes into pricing can make your head spin: competitors, production costs, customer demand, industry needs, profit margins … the list is endless. Thankfully, you don’t have to master all of these factors at once and Abacus Research can help you create a short term pricing strategy or a full pricing study.
More than anything, though, remember pricing is an iterative process. It changes as consumer attitudes and markets change.
With the right amount of research and pricing study, you are more likely to stand a greater chance of success.