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Setting the right price

Company Expert
(@Company Expert)
Admin

There was an interesting article in the WSJ that said the following when setting prices, based on a recent study:

1. Round numbers signal prestige, while precise numbers suggest a bargain
2. Buyers anchor off the first digit, so $3,999 seems far cheaper than $4,000
3. If you cut your asking price, make it easy to calculate the discount

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Topic starter Posted : 28/02/2008 1:05 pm
g_itworld
(@g_itworld)
Active Member Registered

Re: Setting the right price

Here are a few tips to help with pricing:

Do...
1. Know what the market ranges are for the products you produce. What are the lows and highs during the season for sellers in your market area?
2. Adjust your prices frequently to reflect reality.
3. Calculate Break-even Costs to determine how many units you’ll need to sell.
4. Be honest, fair, and ethical in your pricing strategies.
5. Set your prices as though your livelihood depends on it-even it doesn’t.

Don‘t...
1. Undercut prices to gain customers.
2. Sell substandard product at premium prices.
3. Rely on catalog or supermarket prices as a guide for you. They generally reflect volume discounting that you probably can’t afford to offer.
4. Apologize for your price or your product (if it’s not good enough to sell, then don’t sell it).
5. Give away food free just to get rid of it (if you have more than you can use then donate it to a local food pantry). When you give food away you send a message that food has no value.

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Posted : 02/03/2008 5:14 pm
vks
 vks
(@vks)
Eminent Member Registered

Re: Setting the right price

Scott Brogan;33645 wrote: There was an interesting article in the WSJ that said the following when setting prices, based on a recent study:

1. Round numbers signal prestige, while precise numbers suggest a bargain
2. Buyers anchor off the first digit, so $3,999 seems far cheaper than $4,000
3. If you cut your asking price, make it easy to calculate the discount

#2 & #3 make sense, but #1 is interesting I have never heard that before

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Posted : 10/03/2008 12:00 pm
bizfortune
(@bizfortune)
Active Member Registered

Re: Setting the right price

Absolutely on ending prices with .99 or even .97. This is a mental game, as I have read a lot about it. You also clearly need to make sure that your product will bear the price point of what you are offering to sell it for.

Robert

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Posted : 22/03/2008 11:35 pm
Triton
(@triton)
Estimable Member Registered

Re: Setting the right price

It is amazing by taking a few cents off of the price what a difference it makes.

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Posted : 26/03/2008 10:08 am
thouf222
(@thouf222)
New Member Registered

Re: Setting the right price

In over 10 years of working in an IT-related field I’ve seen major progress in company images, external and internal partnerships, even in the way companies promote themselves. A single chapter remains overlooked: the price!!!

Surprising how an aspect so important to a company’s market success – the price – is given so little attention in companies’ strategies and even in specialized literature.
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Posted : 03/09/2009 9:27 am
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