What Price To Charge?

Marketing people say that pricing of products and services is part of the sales process. “Set prices to maximize sales,” they say. Accountants look at pricing this way: “Set prices to cover costs + profit.”

 

Prices can be set too low. The higher the price, the higher the perceived value of the product or service becomes. If the price is too high, though, then it becomes “too expensive”.

 

3 Considerations:

 

• Integrate prices with rest of the elements of the marketing strategy
• Relate prices to needs and perceptions of target market’s members
• Modify prices to match changing competitive environments.

 

So, pricing is an art. The accountant still says, “do not price below your cost.”