The importance of dealing with strategic pricing concerns


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There’s a lot more to pricing products and services than most people realize.

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The importance of dealing with strategic pricing concerns

  1. 1. THE IMPORTANCE OF DEALING WITHSTRATEGIC PRICING CONCERNSFor additional information about Competitive Intelligenceplease visit
  2. 2. www.Intelligence2act.comThere’s a lot more to pricing products and services than most peoplerealize.It’s not just about who charges more or less for a product, it’s aboutneed versus want and the perceived value.Strategic pricing can affect your sales more than you could possiblyimagine, and if a business doesn’t take advantage of these strategiesthey’ll lose out on potential sales.2
  3. 3. www.Intelligence2act.comThere are many different types of pricing strategies for a business tochoose from and how effective they will be is often based on the targetaudience and/or certain demographics.Learn the following strategies and you’ll be able to sell more and havemore control over your business and the revenue it generates than everbefore.3
  4. 4. www.Intelligence2act.com4
  5. 5. www.Intelligence2act.comCREAMINGCreaming is one way to get a profit from your sales and it involves apremium price point.While this is effective it requires people to be willing to spend the topamount of money for a product due to perceived quality. It typically canbe used only for special order items that are hard to find, but in a richdemographic this pricing strategy often prevails.Unfortunately, with rough economic times like the world is experiencingtoday, many companies are avoiding pricing like this unless it is torecuperate the cost of obtaining a rare item.5
  6. 6. www.Intelligence2act.comCOST PLUS PRICINGCost plus pricing would be the most common pricing in retail. Yousimply decide your markup and then apply that percentage to everyproduct.Do you want to make 10% profit or maybe 40%? The choice is yours andthis strategy only has a few problems.First, some products you’ll charge more or less for, at times making itunappealing to certain customers. It also means that you’ll have tomake exceptions for money products and employ other pricingstrategies.6
  7. 7. www.Intelligence2act.comMARKET ORIENTED PRICINGMarket oriented pricing has always been a safe way to go as well.Strategic pricing concerns the competition but with market orientedpricing you’ll be able to keep up with them.Setting your price based on competitors and hopefully just beating theirprices will get you more customers. If you raise the price slightly youcan try to use the same strategy as Creaming, appealing to the top ofthe barrel and charging a premium price point.In this case you can make a profit with fewer customers but likecreaming, this strategy can be difficult in tough economic times.7
  8. 8. www.Intelligence2act.comPRICE FLEXIBILITY STRATEGYThe Price flexibility strategy is one of the few pricing strategies thatconsider the situation of the buyer. Strategic pricing concerns themarket and its customers.When customers are unable to pay full price they often can strike up adeal with you or offer some sort of bargain or trade. Price flexibilitystrategy allows you to vary the price and keep it flexible from situationto situation. While this strategy can upset some customers if they feelsomeone else got a sweeter deal than them, in most cases it workswonderfully and will get you business from all sorts of people. You’ll beable to control the market as well since you are the one in the positionof power. You’ll control the final offer but you’ll also be able to helpyour customers by striking a deal on your quality product or service andthey’ll become more loyal to your brand.8
  9. 9. www.Intelligence2act.comOnce you’ve dealt with your strategic pricing concerns, and come upwith a strategy that works for you, your business is guaranteed toprosper and grow.9
  10. 10. For additional information about Competitive Intelligenceplease visit