January 2013
Intermediate to advanced
186 pages
4h 19m
English
book
Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy--Without Hiring a Consultant, + Website
by Marlene Jensen
Content preview from Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy--Without Hiring a Consultant, + Website
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Chapter 5
Pick the Positioning of Your New Product
In-a-Rush TipThis chapter is critical. You need to read it all!
There Are Only 3 Choices!
There are only three positioning strategies for your prices—but enormous complexities within each.
Your options are only:
1. Lower than your competitors (penetration pricing)
2. Higher than your competitors (skimming pricing)
3. Roughly the same as your competitors (competitive pricing)
How do you determine the best price for your new offering? You must first understand the psychology of your price positioning.
WarningSometimes the best position is simply the one that is open. For example, if you’re planning to launch a new barbeque sauce and the competitors are all priced about the same, that tells you the best position for your new product may be premium priced. If lots of people are buying barbeque sauce, some of them are likely to pay an extra dollar for a better sauce. That extra dollar will cover your extra costs and give you a nicer profit margin. Plus when you launch, your unique selling proposition (USP) is easy and compelling: “Treat yourself to the BEST!”
The Psychology of Price Positioning
It is critical to understand what a price conveys to consumers about your product. One of the biggest mistakes you see with new marketers ...
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.