News BlogSeptember 2008 — Product/Service Pricing Are you introducing a new product or service to the marketplace? If so pricing becomes a big issue. The concern is at what level to list this product or service, presuming, of course, that you plan to publish a standard price list. You need to answer two questions before proceeding further. First, what price are similar competitive offerings being marketed at? Second, what margins do you need to be profitable (take into account all costs, including commissions and distribution)? Pricing should always be based on marketplace not on cost factors assuming that you can at least make money on the item introduced. My contention is that you should price at the upper end of the competitive price scale, not at the mid-point or lower end of the scale (in an attempt to capture customers on the basis of price). Presumably your product or service has certain advantages over competition. These should be stressed in asking for a premium price for your offering. Amazingly customers are often more impressed with quality and service than you, the vendor, may anticipate. Keep in mind you can always lower your price, but it is much, much harder to justify increasing your price following product launch. Build your sales pitch around high quality product attributes and you will be glad you did.
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