Biz Chat: The significance of ‘price’ in marketing
PHUKET: The second element of the ‘4 Ps’ of marketing is price. Price is what your customer pays you in exchange for goods and services received by them.
There are many aspects to this deceptively simple element. In setting your price, you must first decide what is the value of the product or service to the buyer. If you set your price higher than what your target market is willing to pay, you’re likely going to lose out on business. On the other hand, if you set your price too low, you are not maximizing returns to your business, and your product may even be valued as ‘inferior’.
Another important point to consider is your customers’ price sensitivity. This means considering whether a small change in price will affect your market share and profits. If the benefits of a price increase outweigh the loss in customers, it makes sense to do it. If not, you will lose out on market share and profits.
Another interesting elements of pricing is offering loyalty points for a certain number of purchases made. Many successful companies offer loyalty points – Makro, The 1-Card and Starbucks are just a few examples in Phuket.
Finally, carefully consider how your pricing compares with your competitors. There are several pricing strategies you can employ, which is a subject I will explore in more detail in my next column.
— Zohaib Sikander
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