Chapter 18 setting the right prices explains the different types of strategies and processes needed to have an effective campaign. There are 4 steps outlined in the book.
- Establish pricing goals
- Estimate demand, costs, and profits.
- Choose a price strategy to help determine a base price.
- Fine-tune the base price with pricing tactics.
When establishing price goals, you will have to find the audience that needs your particular product and/or service. The target audience will have to be very will defined. A good understanding of the marketplace as well as ones customer, can tell your company if the goals that were set are realistic. Estimate the demand of your product and/or service. Do a survey of the market to determine the demand for your product and/or service in targeted area and weight the difference of the feedback you receive.
Estimate a cost based on the data that you have collected that representative of the marketplace in which you plan on gaining a fair market share of. Project the gross and net profits that the product and/or service will produce with respect to the said total expenditure to carry out the marketing campaign. Determine the right pricing strategy your company will use to gain exposure. Be it price shimming, penetration pricing, status quo pricing, pricing fixing, predatory pricing, and/or a mixture of all or several combined; be sure that you are paying close attention to all of the legal and ethical aspects of your price strategy campaign. Identify and examine the legal and ethical constraints on all of your companies pricing decisions before hand to determine the legal and ethical ramifications of your pricing strategies.
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