![]() buyer motivation (willingness to buy, the risk involved).the target customer (their budget, ability to purchase)-specifically, the value can be estimated by developing an application scenario. ![]() How a customer perceives product value, and the actual value the customer receives, can be estimated by identifying: Value-based pricing attempts to establish the return generated by the product’s use from the customer’s point of view. Value-based pricing: Set the price based on how the customer values the product.Comparison with substitute products: Set the price relative to products for which it will substitute.Bidding price: Set the price according to available information about competitor bids and the customers’ opinion of the product’s advantages.Market price: Set the price according to the main competitor’s price.Then determine the break-even point: the level at which sales figures cover related fixed and variable costs. Rate of return and break-even point: Calculate the unit price: price = unit cost +.Cost + profit margin: Add a profit margin percentage to the costs associated with producing and distributing the product.There are different methods of determining the price for high-tech products. Pricing models and positioning for high-tech products support a product’s positioning and be consistent with the other variables in the marketing mix (product quality, distribution issues, promotion challenges).fit within the realities of the marketplace (customers are willing and able to pay the set price).achieve the company’s financial goals (profitability).Any significant changes in the price will affect the viability of a particular business model.Ī well-chosen price should accomplish three goals: The business model is a conceptual representation of the company’s revenue streams. Pricing is strongly linked to the business model. ![]() Pricing is the only revenue-generating element in the marketing mix (the other three elements are cost centres-that is, they add to a company’s cost). Pricing is one of the four main elements of the marketing mix. In other words, it is time to establish the pricing structure. Once your startup is ready to commercialize its product, you must determine how much to charge customers to purchase the product. ![]() Product pricing can help your company achieve profitability, support product positioning, and complement your marketing mix. ![]()
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