Pricing is another way of promotion. As I’ve mentioned before, offering 50% discount is a good way to get your customers coming. But what do you do about pricing? Or, how do you want your pricing to be when you are just starting out your business?
One way is to offer your products or services at low prices in order to penetrate the market you want to enter in. This strategy is commonly used in mass products since customers in this market are usually price sensitive. We are talking of products that people use daily like sugar, milk, coffee, soap and the like. A slight different in price can make them change from one brand to another or buy an item from another store rather their usual outlet.
But if you want to recover your cost quickly, you can price your products as high as possible. Costs are rapidly recouped after selling only a few items. This is usually done when selling luxury goods like cars and jewelry.
Another strategy is when you price your goods high at the start and then slash it down later. This way you also recover your cost almost instantly. Then you get more clients as your price goes down. This strategy is utilized in technology items like computers and cell phones.
Again, you have to suit your strategy with your target market and with the type of products or services you are providing. These two should always match your strategy to be effective and to be successful.
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