There are many important decisions to make when starting your own business. Although many entrepreneurs keep simplified cost and income records on their own, determining the price of a product is a real challenge for them. How you price it will affect not only the selection of the target group, but also the way potential customers will perceive your offer. To make your task easier, we present the price functions.
What is the role of price in marketing?
First of all, the price plays an informative role, because it tells the customer what value a given product or service has. Additionally, it allows the company to stand out from the competition. It is also worth paying attention to the image-related functions of the price, which are not related to the economic situation, distribution of orders or the cost of production. The offered products are associated with prestige, luxury and high quality. They can also be a determinant of social status.
Pricing strategy it directly affects the margin and profit, and the research carried out so far shows that many companies still do not pay enough attention to it. Some companies inflate prices to emphasize the uniqueness of the product, while other brands offer very low prices to attract a large number of customers.
What are the main features of the price?
Promotional price features play an important role, especially for companies that operate in a competitive industry. Wondering how to convince undecided customers? In this case, it is worth carrying out a promotional campaign.
When it comes to the distribution of goods and services, price is a key tool. This means that it has a redistributive function. It also allows you to shift income from one social group to another, as well as the state budget. It is also worth mentioning the stimulus function, i.e. the simulation function. The prices of products and services affect not only consumers but also suppliers. There is a simple relationship here, the higher the rate, the more the product will earn. In turn, a cheaper product is available to more customers, but may become unprofitable.
How to set prices for products and services?
We will suggest how to create a pricing policy!
Are you wondering how to gain a strong market position and avoid the competition? Bet on brand positioningwhich may be related to pricing policy, visual identity, marketing strategy, communication with customers, product or service. In order to stand out from the competition, you should learn about the needs, interests, problems and motivations of the target group.