Now that you know that you are called to be a business person, you start to learn as much as you can. You’ve decided what the market needs and how you can address that need. You now know how to make a business plan, a feasibility study and everything else in between. But what stumps you at the moment is how to establish a strategic pricing.
How important is strategic pricing? Can’t you just dictate a certain price and expect the market to abide by it? What are the considerations that you need to think about before setting a price on the commodity that you are offering. You must realize that pricing plays a big role in making or breaking your business.
Strategic pricing helps you come up with the correct average as to how you should price your product or service. Set the price too low and the market would think that you are not worth paying the price. Set it too high and nobody will buy. When setting your price, remember that you have to make profit from it. Think also about how much the competitors are pricing a similar product or service and see check out the industry rates. Bottom line is that you must create a delicate balance of profitability at the same time affordability.