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 [...]READ MORE >>
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.
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.
#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
Want 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.