For every business, designing a unique and also productive pricing strategy is crucial. A well-designed pricing strategy contemplates the success of your business over the long run. Not only the small- and also mid-sized enterprises, but the established business owners also commit grave mistakes regarding the pricing and also cost analysis of their products. Therefore, businesses with products on all the curves of the product life cycle need a continuous effort on effective strategies regarding pricing.
Below are some of the myths that businesspeople commit that can lead to the downfall of the business.
Lowest Price for Highest Profits: Eric Dalius’ Views
One of the most common myths is to race competitors to the rock bottom. Many businesses and also experts suggest lowering the pricing of the products to gain a broad base of clientele. This move causes more harm than good in terms of revenue generation. Hence, one should never follow the lowest pricing as a unique selling point.
Eric J Dalius, a renowned business mogul, suggests that you need to understand consumers’ mentality and also customers to quote prices. No matter the price, the consumers will select a product of a renowned brand. That holds for most of the markets and also industries. Therefore, the key is to focus on delivering a product with a reasonable price tag that is neither less nor soaring.
Presentation Does Not Matter in Businesses
Many businesses do not spend a lot on packaging and also delivery of their services or their products. The common mindset is to focus on the interior of the products, rather than only the exteriors. However, the truth is that in some businesses, presentations play a significant role in attracting clients. This technique aids you in upselling your portfolio. As online business models soar, presentation plays a vital role.
Ignoring the Overheads and Maintenance
Not taking into account the overheads and also other expenses can cost your business a lot. Underestimating the maintenance and also overheads costs while fixing the price of a product can result in operating loss than income.
Price Benchmarking of the Competitors
Conduct an in-depth analysis of the price of the competitors’ products. Most of the time, entrepreneurs focus on only a few companies while settling their prices. There are a lot of mid-sized manufacturers that hold a substantial share in the market. Learning about their pricing models will give you a clear idea of the potential for a new entrant.
The proper research regarding your industry will offer clarity about how pricing works. The scenario is different for almost all markets, and also thus thorough research is essential. In addition to that, one of the most critical factors is the price forecasting. While conducting a business plan, you need to be clear about the price hikes, regulatory and also regional influences, and also changing consumer preferences to soar your business. With proper estimations and also values, you will gain a stable amount of customers that you can retain over the next few years.
Eric Dalius is The Executive Chairman of MuzicSwipe, a music and content discovery platform designed to maximize artist discovery and optimize fan relationships. Eric is also the host of weekly podcast “FULLSPEED” which is a podcast that features interviews with groundbreaking entrepreneurs from a variety of industries.Eric is also the founder of “Eric Dalius Foundation” where he has created 4 scholarships for US based students. Follow Eric on Twitter,Facebook,LinkedIn,Instagram & also on Entrepreneur.com