The market and its demand have a direct impact on the pricing decisions that small businesses make on their products or services. Our marketing consultants in Sydney analyse numerous external factors that can affect a business’s pricing decisions which range from consumer’s perceptions, competitor’s pricing and price elasticity of demand. Detailed below are some approaches that our small business marketing consultants in Sydney recommend when choosing a pricing strategy.
Cost-Based Pricing
This pricing approach involves allocating the costs to the design and manufacturing of a new product. The objective is to set a price that covers cost as well as the business’s target profit. A piece of marketing advice for small business in Sydney is to convince buyers that the products price is justified by its value for money.
Competition-Based Pricing
There are three different types of competitor pricing that our marketing consultancy in Sydney have defined below:
- Economic Value Pricing: The price set by a company is lower than customers’ perceived value and lower than that of its competitors.
- Going-Rate Pricing: Price based largely on competitors’ prices, with less attention paid to its own costs or demand.
- Sealed-bid/Tender: Company bases its price on how it thinks competitors will price (e.g., job offers, governmental tenders).
For more information regarding the external factors affecting pricing decisions, please contact our marketing consultants in Sydney today.