5 Pricing Strategies and Their Benefits for Business

Set selling price apparently can not be done originally. There are several pricing strategies that can be applied to generate high-profit selling prices. But, unfortunately, there are still many businesses that don't know this so they don't implement it.

For those of you who are just about to set a selling price, don't let that happen to you. Understand the following pricing strategies and apply the one that best suits your business.

Pricing Strategy

Pricing strategy or pricing strategy is a pricing method used by a business or company.

There are five methods, one of which you can use to determine prices, among others mark up, set cost plus price, based on competitors, BEP setting, and based on market demand.

Mark up

mark up is a fairly simple pricing method using product cost at the beginning of the purchase as a guide.

That way, businesses that apply this method will always look at the initial price of the product and then increase it a few percent as profit.

Setting Price Plus

The second pricing method that can be applied to small to large businesses is to charge a plus price.

Different from mark up, this method is based on the overall cost used to make a product. Then, to cover profit, The total profit is added to a certain amount.

Setting Prices Based on Competitors

Another pricing strategy option is to set prices by looking at the competitor's business. You can do research on the selling prices set by competitors.

By applying this method, you can analyze the selling price which in case can attract more customer and remain profitable.

Set Break Even Point (BEP)

Determine the selling price by calculating the value BEP (break even point) can also be one way that you can use in your business. For a discussion of how to calculate break even point, you can see more HERE.

Based on Market Demand

In addition to researching competitors, you can also determine prices by researching directly on market demand. You can do research from feedback provided by consumers, consumer price requests, and other forms of advice.

Benefits of a Pricing Strategy

Why do you need to use a strategy in setting the selling price? Here are the benefits you can get:

• Businesses can penetrate the market easily.
• Increase value and brand image.
• Businesses are helped to develop higher quality products.
• Increase focus on customer service.
• Businesses can command high price points.
• Promote customer loyalty.
• Proving data on consumer willingness to pay part.

Those are 5 pricing strategies and the benefits your business can get. After understanding the five methods, choose one method to apply to your business and get a lot of benefits.

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