Académique Documents
Professionnel Documents
Culture Documents
Pricing strategies
The purpose of this guide is to highlight some of the more
important considerations for small and medium-sized businesses
planning to develop or revise their pricing strategies. Business UPDATE
•
Introduction Increasing market share
portion of your ixed costs plus an
• Achieving a speciic rate of return on amount added towards proit, which is
A business might set or adjust prices sales or investment usually expressed as a percentage of
when they start up, when introducing cost.
• Maintaining or improving growth
a new product or service, to achieve a
new business objective, or in response to • Achieving or maintaining price leadership It is important to be aware of the
changes in the marketplace or the general • Matching competitors’ prices or gaining a effect any price change will have
economic climate. competitive advantage on variable costs and factor this into
your calculations. Care must also be
Whatever the occasion, setting prices for • Enhancing the image of the business, taken not to overlook hidden costs and
your products or services is possibly one product, or service inadvertently overestimate potential proit
of the most important business decisions • Preparing the business for disposal per sale.
you make. It does have a considerable
• Survival in a challenging market place. One drawback with cost-plus pricing is
impact on your proitability and thus
can be a decisive factor in the inancial Once you are clear about your pricing that it does not take adequate account
success or failure of your business. objectives the next step is to decide on the best of demand and it can often be dificult
strategy to achieve them. to assess how changes in price might
Setting objectives affect demand.