subject: Manitoba accountants - Pricing strategies for your business [print this page] Manitoba accountants - Pricing strategies for your business
One of the most important business decisions that can be, and often has to be, made is one regarding the pricing of a particular product or service, since this is what would differentiate a brand from competition. Here are a few tips regarding the various pricing strategies used by Manitoba accountants to give businesses a distinctive edge in the present business scenario.
High pricing strategies
These are basically of two types:
Creaming This refers to selling a product at a higher price and making sufficient profit before new players come into the picture. As expected, this strategy works well for new products or new markets only. Premium pricing This refers to leveraging the consumer's tendency to form an opinion that a lower priced products would have inferior quality compared to a high-priced one. This strategy, one of the most frequently used ones by Manitoba accountants, calls for the product pricing to be done higher than present similar products in the market, but at the same time also offering a better quality product, all the while ensuring that the profit margins are maintained. This strategy is commonly used in the fashion industry, where consumers pay more for designer brands as they consider them as a superior quality offering.
Low pricing strategies
These are of three types :
Penetration pricing A basic level pricing strategy that calls for setting the price of a product very low to surge ahead of competition. This is also one of the most challenging implementations for Manitoba accountants, since they have to work on how to best give a low price and yet derive profits.
Promotional pricing This is a short-term pricing strategy wherein the price of a product is reduced for a certain span of time to increase its awareness and boost sales. Once the product is relatively well known in the market, the price is then gradually increased.
Loss leader One of the most innovative pricing strategies, this calls for offering one of the brand offerings to be priced marginally lower than its cost of production, and once the product is popular, to introduce more products that would cover up its loss and make more profits than they could have otherwise.
