Creating a product or service and managing it virtually is a process that is becoming more professional and entrepreneurial every day. For this reason, knowing how to price products correctly is one of the strategies you can use to have a differential in your brand and .
We know that many people are looking for good services, but that is not always what they want, since the quality of the materials, the price and the diversified payment terms also attract a lot of buyers’ attention.
So knowing how to price products is also a marketing strategy. After all, the value you assign to your services can be a great way to attract new customers and even retain the ones you already have.
That is why we have made this post, to help you understand how you can better calculate the sale price of your products and services.
In it you will find information about:
Well, let’s go ahead with each one of them!
How to set the prices of your products
Knowing how to determine the price of your products or services means understanding the relationship between the values invested from production to the marketing strategies that were used. That is, you have to analyze all the variables that you used to create your product.
The price of your product must always be in tune with what it offers.
But, in addition, you also need to calculate the price taking into account the perception of value that the has in relation to the item to be sold.
At the end of the day, do you know how to find out?
First of all, you need to research and understand people’s real pains and problems. Thus, when you create your product, you will be able to produce something that .
That will make you perceive the importance that your audience gives to the product you have created based on the benefit that it will provide to buyers. In other words, pricing is directly related to the cost and benefit of what you offer.
In addition, another factor that must be considered when setting the price of your product is its demand. The scarcity or abundance of a product in the market is a primary factor that determines different values of a good or service.
When something is highly sought after and also highly produced, there is a lot of competition. From this perspective, people have more options to choose from and, therefore, many are interested in more affordable products.
Meanwhile, when a product is highly sought after, but there are not many options on the market, the sale value may be higher. The scarcity of a product makes it more valued.
So, defining the price of products is knowing how to correctly assign an economic value to what you produce, taking into account all these variables.
What is the best pricing strategy
Even before choosing a strategy to determine the price of your products, you must understand that calculating the sale price always has the same purpose: to increase the volume of sales and to make a profit with what was produced.
Once you have managed to calculate all the variables that influence the pricing of your product, you can now think of a high or low ticket.
Do you know their meaning and the difference between them?
high ticket
When we talk about high ticket, we refer to products with a high marketing value, that is, those that are considered “expensive” when compared to similar ones on the market.
This may seem like a bad strategy for someone who wants to sell a lot. However, pricing high-ticket products isn’t always a bad idea. Also, pricing depends on the type of product you are selling.
When you have a product that does not yet exist on the market or that does not have much competition, it is interesting to launch it with a higher price, being able to justify it by product innovation.
Also, choosing the high value product launch strategy is a good starting option. You can introduce the product with its maximum price and gradually reduce it according to demand. So, the high ticket would only be sustained as long as your product was a novelty on the market.
However, there are also disadvantages to choosing this strategy. Depending on the value you assign to your product, people may not be interested in buying it. Therefore, it is very important to align the price with the expectations of consumers.
low ticket
A low-ticket product is one that is marketed at a price lower than the average price of similar products offered by the competition.
By choosing this strategy you attract the attention of a large part of the consumer market that wants what you offer. And when people perceive the quality of your products, you gain loyalty immediately.
By launching your product on a low ticket, you may gradually make readjustments when necessary.
Offering products with low prices is an optimal strategy for products that are common and in a very competitive market. In this way, you will obtain an economic advantage and, therefore, you will be able to sell in greater quantity.
Even so, if the price is much lower than that of your competitors, you can convey the wrong image of what you are selling. Some buyers may discount your product and think there is something wrong with it.
When to use each strategy
Both high ticket and low ticket are great pricing strategies, so which one to use depends on your goal for each product created.
If your goal is to enter a competitive market, with a product that can be easily found, the low ticket helps you quickly capture consumers who want quality products, but with low prices.
On the contrary, if you intend to create an innovative product that is rarely available, choosing the high ticket gives you a higher profit, even if the amount of initial sales is not that high.
The important thing when you are going to set the price of your products is to know that you must provide profitability to those who produce or market your products.
Of all the variables you have, from the creation to the sale of a product, the price is the most flexible, which means that, regardless of the strategy you choose, you can change the pricing if you consider it necessary.
Always be based on a fundamental factor: the price you set must be high enough to generate profits for the producer, but it cannot be so high as to inhibit the purchase. And it should be low enough to attract buyers, but not so low that the product is thought to be of poor quality.
How to know if you have chosen a good strategy
As you may have already noticed, the definition of a strategy to set the prices of products is not something stable. But to know if you need to change the price, it is necessary the financial return you have obtained with your product.
A good marketing strategy is the one that manages to measure everything you have done and, based on the results, perfect the techniques to further improve what has been done.
One of the most important metrics associated with marketing is ROI (return on investment). It is very important to know if the sale of your product generates financial benefits after all the investment you have made to create it.
In a simplified way, ROI is the metric that shows how much you have earned for each euro you have invested in your product.
Therefore, if your ROI is high, it means that you have profits, and that can be an indicator that your pricing strategy has been good.
Knowing how to set prices for products is an important strategy for those who want to start a business in the digital market. Therefore, when you are going to stipulate a value to your products, do it carefully and always thinking about what you want to achieve.
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