Going rate pricing: this strategy is a safe way for small businesses to remain competitive without eating into profits.When using this method it's important to factor in all your business costs and not overlook taxes, a wage for yourself, superannuation and leave entitlements. The 'per hour' method calculates all the relevant costs of a business at an hourly rate. Charge per hour: this strategy is often used by service-based businesses and independent contractors.If your calculations are accurate this strategy can keep your price competitive while ensuring that you still make a profit. Care should be taken when calculating your price to ensure that all relevant costs such as cost of goods sold, fixed costs including Goods and Services Tax (GST) and other taxes are factored in. Cost-plus pricing: a strategy that adds a small margin or mark-up to the costs of producing and distributing the product or service.When choosing your pricing strategy, keep your overall marketing strategy in mind to ensure your strategies complement one another. There are a number of pricing strategies you can employ when setting your price, including strategies based on: When multiple products or services are involved, it's a good idea to be aware of how the prices complement each other. Using price to increase demand in new or existing products or services can be a good objective for establishing customers or boosting lagging sales. When setting prices it's always important to anticipate what your competition will do in response to your prices and ensure that you factor it into your strategy. Remaining competitiveįor many businesses, being price-competitive is important, whether as a price leader or responding to the competition. Price can indicate a level of quality so it's important that the price of your products or services complement your overall brand. For example, your business might sell high-end products, try to compete on price, or get into the budget level market. Positioning can help you establish your products or services in the market. By establishing your pricing objectives early, your choice of strategy may be easier to determine.
It's important to keep your business and marketing objectives in mind when developing your pricing objectives to ensure they complement one another.
ability to supply to or increase demand.One objective of pricing is to make a profit on your products or services, but there are many other pricing objectives that can affect your pricing decisions including: A key consideration when you develop your pricing strategy is to understand your objectives when you price your products or services.
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