After two decades of business experience in various industries across the globe, led me to believe that most of the companies at different stage of growth struggling with pricing management and how to set the right pricing method.
Some of those organizations were completely out of understanding what is the importance of the Pricing. My observations will be reflected in decomposing the pricing in steps to be understandable to every product manager line or even senior management leadership.
Pricing management is about setting the right price point. The most important thing in setting the right price is: Do you know your business? Businesses need to consider the cost of their products and services, as well as the perceived value of those products and services. If clients and market environment perceive that a product or service is worth more than it actually costs, they are more likely to be willing to pay a higher price for it. Is it always possible to get higher price and what are the components every product manager needs to know once is setting price- are the questions most of them having a problem to answer.
Pricing management is an important part of any business. It has a major impact on the company’s bottom line. Bottom line numbers will tell the story and it will require the actions, usually will request to stabilize the margins. Unsuitable leadership will most likely take the actions of cost cut not even to dare to look and compare existing pricing models to actual staffing models. To prevent bottom line issues pricing managers must be responsible that all of the different factors are taken into account and that prices are set correctly. They could use a variety of methods to do this, such as market research, cost analysis, and more. All pricing managers should understand importance of the Pricing Strategy:
I would separate 5 groups of Importance of Pricing:
· Importance of Pricing –: Marketing Mix Elements, Right Level, First Impression and Vital Element of Sales Promotion
· Importance of Pricing – Inflation Included, Products and Markets, Customers Perception, Competition
· Importance of Pricing – Economy, Determinant of Profit, Beating Competition, Demand Regulator, Decision Input.
· Importance of Pricing – ROI, Determines Demand, Sales Volume and Market Share, Countering Competition.
· Importance of Pricing – Costly, Expensive, Cheap
Comments