8lCL

rlce means Lhe prlclng sLraLegy you wlll use ?ou have already flxed as an hypoLhesls a cusLomer prlce
flLLed Lo your cusLomer proflle buL you wlll have now Lo bargaln lL wlLh Lhe wholesalers and reLallers uo
noL be foollsh 1hey know beLLer Lhe markeL Lhan you and you have Lo llsLen Lhelr advlces
rlclng sLraLegles
ln facL you have Lo choose beLween Lhree sLraLegles
CompeLlLlve prlclng lf your producL ls sold aL Lhe lowesL prlce regardlng all your compeLlLors you are
pracLlclng compeLlLlve prlclng SomeLlmes compeLlLlve prlclng ls essenLlal lor lnsLance when Lhe
producLs are baslcally Lhe same Lhls sLraLegy wlll usually succeed
8emember LhaL Lhe success of compeLlLlve prlclng sLraLegy depends on achlevlng hlgh volume and low
cosLs lf your prlces are lower Lhan your cosLs you are golng sLralghL Lo bankrupLcy! 1o avold such a
mlsLake you have Lo Lake noLlce of Lhe break even raLlo LhaL you wlll flnd below
CosLplusproflL lL means LhaL you add Lhe proflL you need Lo your cosL lL ls also called cosLorlenLaLed
sLraLegy and ls malnly used by Lhe blg conLracLor of publlc works 1he auLhorlLy may have access Lo Lhe
cosLlng daLa and should llke Lo check lf Lhe proflL added Lo Lhe cosL ls noL Loo hlgh
ln facL Lhls sLraLegy ls only good for a buslness whom Lhe cusLomers are publlc collecLlvlLles or
governmenL agencles
value prlclng lL means LhaL you base your prlces on Lhe value you dellver Lo cusLomers lor example
when a new Lechnology has a very large success you can charge hlgh prlces Lo Lhe cusLomer 1hls
pracLlce ls also called sklmmlng lL ls easy when you are ln Lhe lnLroducLory phase of Lhe producL llfe
cycle
value prlclng ls also common ln luxury lLems SomeLlmes Lhe hlgher Lhe prlce Lhe more you sell
lashlonable cloLhlng or resLauranLs for snob people Cf course value prlclng ls llmlLed by Lhe prlce
elasLlclLy as you have already learnL ln Lconomlcs