Pricing Strategies for Small Businesses – Competitive Pricing

The competitive pricing strategy is by definition a strategy that considers what happens outside the perimeters of a business. It is more sophisticated than the Cost-Plus Pricing Strategy that was discussed in an earlier post.

Indeed, competitive pricing decisions involve significant market risks and managerial attention 1. So, if your business does not have the structure and culture to keep an eye on what is happening in the market for your product, you’ll probably have no sales or have lots of sales, but at a loss!

Let’s look a bit deeper at the practice of competitive pricing…

 

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The Challenge with the Pricing of Products or Services

Pricing of products or services may have a huge impact on your business’s bottom line and its brand value. Indeed, price is the only element of the marketing mix that brings revenue and not costs. Even more, price is the element of the marketing mix that is the easiest and fastest to change 1.

The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market. The 4Ps make up a typical marketing mix - Price, Product, Promotion and Place. ... Price: refers to the value that is put for a product. (https://economictimes.indiatimes.com/definition/marketing-mix)

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