Isaac castañeda Morales / 0263692

The importance of setting the right price.

Price is a peculiar factor when creating or selling a service or product. It is one of

those things that you must treat with care and precaution, since price placement can
either make or shatter a business.

A good price placement can give many things to a business, things like making the
right money to afford all your costs and make a profit, standing out from the
competition, Competitive positioning, adding a perceived value to the product, inflate
the sales by taking advantage of the market demand, providing a brand image
making your product a “Luxury brand” for example, retaining and acquiring
costumers with discounts, promotions or even loyalty programs, it can be of great
use whet entering new markets or expanding in an already existing one.

it is also very important to understand that pricing must be flexible shifting

momentarily through market fenomena or costumer preference.

Pricing Strategies

setting the right price is not only a matter of math and logic, we must take into
account external factors that may affect the image or perspective that the customers
and public will have of our product or service; There are many pricing strategies that
take into account these external factors to set a price that will not only give profit but
will also position the product in question in the market.

1. Cost + pricing:

This strategy brings together all the contributing costs for the service or product to be
sold, adding a fixed Markup percentage to the subtotal
 2. competitive pricing :

Cooperative pricing- Match what the competitor is doing

Aggressive pricing- Always keep your prices lower that the competitors
Dimissive pricing- ignore competitors, maintain your prices as if you were the only
competitor

3. Price Skimming

This focuses on innovation and new products, charging high amounts when the
product is recent and decrease the prices as time goes by

4. Penetration Pricing

Tart ith low pricing to make a big costumer base quickly

5. Value-Based pricing

“Make sure the value to the customer is higher than your costs. Otherwise, you will
lose money with every product you sell.” -Eric Donlasky-

based on the value your product may represent to your customers based on how
well is your product suited to the needs and wants of each customer.