#BUNDLE PRICING STRATEGY HOW TO#

When companies pair several products together and sell them for less money than each would be individually, it’s known as bundle pricing. Like premium pricing, adopting an economy pricing model depends on your overhead costs and the overall value of your product. Big box stores, like Walmart and Costco, are prime examples of economy pricing models. You can also vary strategies between products depending on the market for each good or service.Īn economy pricing strategy involves targeting customers who want to save as much money as possible on whatever good or service they’re purchasing. If you’ve already launched your business, you can experiment with these strategies until you determine what works best for your business. You’ll likely need to develop a “luxury” or “lifestyle” branding strategy to appeal to the right type of consumer. The key with this pricing strategy is developing a product that is high quality and that customers will consider to be high value. Premium pricing is for businesses that create high-quality products and market them to high-income individuals. It’s also crucial to develop a loyal customer base, which can require other marketing and branding strategies. Many factors go into deciding on this strategy, like your business’s ability to potentially take losses upfront to establish a strong footing in a market. Once you develop a reliable customer base, you raise prices. Instead of starting high and slowly lowering prices, you take over a market by undercutting your competitors. Pricing for market penetration is essentially the opposite of price skimming. A successful skimming strategy hinges largely on the market you’re looking to enter. It gives companies the opportunity to capitalize on early adopters and then undercut future competitors as they join an already-developed market. This type of pricing is ideal for businesses that are entering emerging markets. Skimming involves setting high prices when a product is introduced and then gradually lowering the price as more competitors enter the market. Consider these seven common strategies that many new businesses use to attract customers. There are dozens of ways you can price your products, and you may find that some work better than others - depending on the market you occupy.

Pricing strategies to attract customers to your business While you may have already done some of this legwork when developing your business plan, it’s good to have as much insight and information as possible before you decide what pricing strategy to adopt.

This kind of research can range from casual conversations with friends and family to formal surveys of potential buyers.

#BUNDLE PRICING STRATEGY HOW TO#

This can give you valuable insight into how to set your pricing. In an economy where there are thousands of small businesses providing the same products and services, an effective pricing strategy can help you stand out.Ī good final stage in your research is speaking with potential customers to get a feel for how they value your brand, product or service. Understanding your competitors’ strategies can also help you differentiate your business from other businesses in the market. No matter what pricing strategy you adopt, what your competitors are doing will impact your business’s success and future decisions. Determine three to five main competitors in the industry by conducting online research or scouting out local businesses. Once you define your goals and needs, do some research on the market you’re entering. This involves some commercial soul searching - what do you want your business to contribute to the economy and world? This could mean embracing a traditional retail strategy, establishing a service business mindset or emphasizing personal customer relationships in your offering. It should be a calculated, informed choice in which your business identity, brand and financial stability are considered.Īs with any business decision, determining your pricing strategy starts with assessing your own business’s needs and goals. Setting your product or service’s prices shouldn’t be a haphazard decision focused entirely on profit. What to consider when setting your pricing strategy That’s why it’s important to have a carefully planned pricing strategy. The way you price your products or services can be a reflection of your business’s identity, how you view and treat your competitors and how you value your customers. Setting your business’s prices may seem simple: List your product for higher than it costs you to manufacture or acquire it, and you’ll make a profit.īut your prices are more than just numbers. Choosing the right one is essential to your business's success. There are several options when it comes to developing a pricing strategy.

Bundle pricing strategy