How To Establish Your Pricing Strategy

SMH see there are number of pricing strategies you can employ when setting your price, including strategies based on costs, competition, perceived value or the product itself. It’s vital to establish your pricing objectives early to help you make your choice of strategy simpler. When choosing your pricing strategies, it is important to keep your overall marketing strategies in mind to ensure your strategies complement one another.

There are numerous amounts of pricing strategies, such as:

  • Cost-based pricing strategies
    – Cost-plus
    – Charge per method
  • Competition-based pricing strategies:
    – Going rate pricing
  • Value-based pricing strategies:
    – Value pricing
    – Premium pricing
  • Product-based pricing strategies:
    – Penetration pricing
    – Skimming pricing
    – Loss leader pricing

Read more at http://www.smh.com.au/small-business/resources/select-pricing-strategies-20140717-3c22n.html

Learn how Stratinis can help you make better pricing decisions

Does Amazon Have An Unsustainable Pricing Strategy?

As seen in Tech Times, Amazon has been profiting from its new Fire smartphone, but will need to sell more in order to truly recoup its investment given handset features. Senior director, Andrew Rassweiler states “the features that differentiate the Amazon Fire Phone – particularly its unique Dynamic Perspective interface required the development of specialized hardware and software”.

Ian Fogg, senior director for mobile media at HIS, states Amazon’s high risk launch price strategy is unsustainable for a smartphone entrant like Amazon, simply having a well-known brand on the box is not enough to sell smartphones, as Nokia and Motorola know well.

Industry watchers note Amazon’s pricing and sales strategy with Fire is quite different than its Kindle e-reader approach where the giant e-tailer took a loss on costs to obtain the e-reader into the market.

Read more at http://www.techtimes.com/articles/11630/20140730/amazon-fire-profit-small-but-big-sales-could-bring-big-revenue.htm

The Online Pricing Trap

Shermans Travel delve into the Internet truths –  For as much as the Internet empowers, there is a dark side to your web browser – namely in its ability to identify you. While it might be convenient to enable your computer to store passwords, recall usernames and save address details; it may not be so beneficial when purchasing travel and services.

This phenomenon has become know as ‘dynamic pricing’ – where online retailers adjust pricing for different consumers, dependant on factors like where they live and what computer they use. The less companies know about you, the more likely you are to obtain a fair price. Here are a few tips on maintaining a higher level of secrecy:

  • Search with anonymous engines
  • Clear cookies and cache
  • Disable location
  • Use private window browser
  • Install plug-in

Read more at https://www.yahoo.com/travel/the-dynamic-pricing-trap-how-your-location-can-cost-92757248712.html

A Pricing Structure That Engages

Fstoppers realises that pricing can be approached with apprehension and anxiety. It is a topic of much discussion and debate among creative professionals, but with slight ingenuity one can break away from tedious pricing and use it in a way that will excite clients and build a brand identity.
 
To create a pricing structure that engages clients, breaking away from the norm of simply listing prices and creatively building a brand identity is vital. This can be accomplished by:
 

  • Supporting shared visions
  • Rewarding lifestyle choices
  • Showing compassion
  • Appearing more human

How To Monitor Competitor Pricing

Here are 10 ways to monitor your competitor pricing:

1. Realize that competitor prices are important but also that it is only an input. You could be driving prices semi-independently of competitors.

2. Make a plan for how you can grow your competitor price monitoring capabilities in the organization. Very few companies have access to instant, perfect competitor data.
3. Accept that you may never have “perfect” competitor price data. This is OK. It is better to have some than to be daunted by the task and have none.
4. Make data gathering repeatable and fast without significant manual effort, otherwise it will not be done. Insights that are not updated are not actionable.
5. Invest in automated tools. There is only so much you can do in a spreadsheet.
6. Spend sufficient time on getting the product mapping right (which products to compare).
7. Make your process and tools capable of getting competitor pricing data from multiple sources. Very few perfect single sources exist.
8. Consider investing in an external service for gathering the raw data. This exists in a number of industries and prices are coming down.
9. Collect prices often – at least once per month. In some industries (such as e-commerce) do this even more frequently.
10. Use insights into competitor prices tactically as well as strategically. This requires automated analytics of the data and rapid dissemination of such insights.

How To Stimulate Repeat and Cross Purchases – Organic Foods

Organic food price plans can bolster sales and encourage cross-purchasing, however high and low pricing have different impacts, find researchers. Low cost organic products are more likely to to be repurchased but a high price strategy could prove more effective in encouraging cross-purchasing across ranges.

Published in the Food Quality and Preference, researchers investigated the market performance of four Danish organic sectors – red meat, chicken, milk and hard cheese. Currently 47% of the global organic market is in Europe, with Denmark having the highest organic market share worldwide.

The findings showed that while a low cost pricing strategy for organic products could strengthen the category through repeat purchases, a high cost strategy often considered a purchasing obstacle, was not always a disadvantage.

Read more http://www.foodnavigator.com/Science-Nutrition/Organic-food-pricing-High-versus-low-to-stimulate-purchases

Smart Pricing Strategy Tips For Your Subscription Business

TechRadar Pro see Netflix and Spotify attempting to become the de facto standards in their paid-for video and music streaming services. For these subscription based businesses a smart pricing strategy is needed. Here’s a breakdown of how this can be achieved:

  • Offer a range of price points
  • Lock customers in with discounts for longer term subscriptions
  • Communicate price increases carefully 
  • Differentiate price increases if possible 
  • Carefully control retention strategy 

Read more at http://www.techradar.com/news/world-of-tech/management/lessons-from-netflix-and-spotify-how-to-perfect-subscription-strategies-1255816  

How to Display International Pricing?

A recent article by Business 2 Community highlights the importance of having an accurate international pricing strategy. The most common way for companies to handle pricing products in multiple currencies, is to show all currencies on a single page or duplicate websites or stores for each currency/region.

The article uses examples of current companies and how they implement their pricing products across regions. International e-commerce giant PayPal display multiple currencies on a single page. At a glance, this method may not seem problematic to enable users to self-select their region/price and buy the product. However, requiring customers to self-select is an extra click and decision point that is completely unnecessary. Additionally, what happens if a customer in Europe attempts to buy via an American region? The product would be at a 35 percent discount, due to dollar-for-euro converted price. This unfortunately is a loss of money and may cause channel conflict with local distribution partners.

Entertainment software company, THQ adopt their pricing by different prices shown by country, customers first must select their country of origin via clicking their country flag. This interstitial page option eliminates the previously noted problem about customers seeing more than one price. However, there are no restrictions preventing customers from choosing an incorrect region and buying at a reduced price.

The big question remains as to what is the best way to portray international pricing?

Read more at http://www.business2community.com/product-management/display-international-pricing-right-way-0943635#kBUQMiKrSuro2YHE.99