Tag: new product pricing strategies

New product pricing strategies

4 Reasons Why Your Product Pricing Strategy Needs an Update

Setting competitive prices for your new or existing products and services can be challenging. If you set prices for your products or services too high, you’ll miss out on valuable sales. Conversely, if you set prices too low, you’ll miss out on valuable revenue. Also, providing excessive discounts can hinder a company’s profitability. In this context, it becomes vital for businesses to be proactive about identifying when and what changes you need to make to stay ahead of the competition.

So, with today’s consumers and businesses alike demanding more for less prices, how do you analyze whether your product pricing strategy needs an update? In this article, our experts have explained the 4 major reasons why businesses must revamp their new product pricing strategies to gain a competitive advantage.

A Company’s inability to efficiently price a new product can degrade the value of the brand and lead to a price war. However, revamping new product pricing strategies to meet the market demand can become a competitive advantage. Request a FREE proposal today!

Reasons Why Businesses Must Leverage New Product Pricing Strategies

#1: Company’s lack of accurate competitive pricing data

In today’s competitive marketplace, constantly monitoring and benchmarking against the competition is becoming crucial for businesses to capitalize on new market opportunities. Businesses that are still employing traditional methods for manual data collection can no longer gain a competitive advantage as manual data collection is highly time-consuming. Hence, it’s high time for organizations to revamp their new product pricing strategies and proactively respond to the competitors’ pricing strategies by efficiently tracking their new product pricing strategies and models.

Competitive pricing strategy can help businesses in this context. By leveraging competitive pricing strategies, businesses can make changes in their pricing strategies to meet the market competition and capitalize on new market opportunities.

#2: Inability to understand price elasticity

Understanding price elasticity helps businesses to analyze how customers’ respond to the price fluctuations in the market. Also, as different products and services have distinct price elasticities, businesses need to understand how customers’ react to the price changes in the market. Also, analyzing past sales data and conducting new product pricing segmentation can help businesses in setting competitive prices. Companies that fail in doing so need to revamp their pricing strategies to stay competitive in the marketplace.

New product pricing strategies work best for these brands looking to understand the price elasticity for a product or service.

With our expertise in formulating new product pricing strategies for various global giants, we can help you to estimate the accurate prices of your products or services and determine if it meets your consumers’ expectations. CONTACT US to know how our new product pricing strategies can help your business.

#3: Inability of value-based pricing strategy model

A company’s inability to adapt with value-based pricing strategy model can prove to be costly. Also, the lack of a value-based pricing strategy model subsequently impact the company’s sales rate and increases customer churn. Hence, companies that lack a value-based pricing strategy or new product pricing strategies may lose sales to competitors.

In this instance, businesses realize the real importance of revamping their new product pricing strategies. By leveraging new product pricing strategies, businesses can satisfy customers’ demands and boost customer loyalty.

#4: Employing an overly simplified new product pricing model

In today’s technology-driven business world, using traditional pricing strategies and models can longer help businesses. Gone are the days when companies leveraged cost-plus pricing by relying solely on the cost of production. It’s high time for businesses to leave behind traditional pricing models and take into consideration factors including seasonal fluctuations, competitor pricing, and product value while setting prices.

By leveraging Infiniti’s new product pricing strategies and solutions, businesses can efficiently tackle these challenges and competitively set prices for their new products and services.

Product pricing strategies for a new product

NEW PRODUCT PRICING SRATEGIESWant to know the right product pricing strategies to follow to efficiently price your new product or service? Read the article here on new product pricing strategies.

Pricing a New Product: The Right Product Pricing Strategies to Follow

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Product pricing strategies

Pricing a New Product: The Right Product Pricing Strategies to Follow

Charging a lesser price for a new product may not always be a good decision.

One of the key questions to answer while launching a new product is- how much should the product be priced at? But the dilemma that most companies face here is that if they charge too much for a new product it won’t sell, and if the product is priced too low the product’s market value proposition becomes low. Moreover, once companies decide on their initial product pricing strategies and a price is set for a product, it becomes extremely difficult to raise prices.

Today, businesses and consumers alike are demanding more for less, making it even more difficult for brands to formulate product pricing strategies that are favorable to all the parties involved. Global competition, increased pricing transparency, and lesser market entry barriers across industries are forcing brands to rethink their new product pricing strategies. Before zeroing in on their product pricing strategies, companies must have a clear estimate of the highest and the lowest price that they could charge for a product. Then a detailed price-benefit analysis must be undertaken during the preliminary stages in the product development cycle. This not only shows companies whether price barriers might make products unfeasible but can also guide their development by indicating the product attributes for which customers may be most willing to pay for.

Planning a new product launch? Request a free proposal to know how our experts can help you build successful product pricing strategies with effective market insights that you may have overlooked.

Product pricing strategies for a new product

Product pricing strategiesSome of the key product pricing strategies that can be used for a new product include:

Segmentation pricing

Pricing a new product could often prove to be a challenging task. An important tactic that can be followed by companies is to set different prices for different market segments. In order to enhance profits, markets can be split into sectors based on differences in price sensitivity. Higher prices can be charged to those who are impervious and lower prices to the more price sensitive customers.

Penetration pricing

Companies often get tempted to build market share, especially with the launch of every new product, through aggressively low prices. This competitive product pricing strategy is known as penetration pricing. However, a fixation on volume could reduce profitability and consequently ignite a price war. As a result, it is generally advisable to keep upward pressure on prices and promote good industry pricing behavior. On rare occasions, however, the price lever may be an effective tool to undermine competition.

Not sure about the right product pricing strategy for your new product? Request a free brochure to learn more about our solutions and how they can help enhance your new product pricing strategy.

Cost compression curve pricing

Cost forecasting for pricing new products is based on the cost compression curve, which relates the actual manufacturing cost per unit of value added to the cumulative quantity that is produced. This cost function is mainly the consequence of cost-cutting investments to discover and achieve internal substitutions, automation, worker learning, scale economies, and technological advances. Usually, these move together as a logarithmic function of accumulated output. Such product pricing strategies are highly effective when the product superiority over rivals is minimal and when entry and expansion by competitors is easy and probable.

Learn more about Infiniti’s new product pricing strategies

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Top Pricing Strategies in Marketing You Cannot Miss Out On

Deciding how much to charge for a product or service requires more thought than merely calculating the costs and adding a mark-up.

Pricing strategies and methods often prove to be extremely complex and intense as it includes a number of calculations, research work, risk-taking ability, and understanding of the market and the consumers. The top management of the company considers a number of factors before pricing a product. This includes the ability of a consumer to pay for the products, the segment of the product, the action of the competitor, the conditions of the market, the production and the raw material cost or the cost of manufacturing, and the margin or the profit margins. An effective pricing strategy helps to identify competitive prices for a product or service. Adopting a competitive pricing strategy also depends on whether the company wants to achieve operational efficiency or product leadership. If the company’s value proposition is operational efficiency, then they need to follow a highly competition based pricing tactic. On the other hand, if the company’s value proposition is product leadership or customer intimacy, the offerings need to be priced on the higher end when compared to similar products in the market. This gives the customers a feeling of uniqueness and loyalty to the brand. This blog from Infiniti Research curates some of the top pricing strategies in marketing that our industry experts feel are most relevant in today’s business scenario.

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