Pricing strategies will be the topic of the next four posts on this blog.
Each of these posts will answer a question that will help you with your pricing strategies.

The first question regarding pricing strategies is:

What Extenuating Circumstances Should Influence Your Product’s Price?

This part of your pricing strategies includes the exclusivity of the product, whether or not others provide a similar product, and how high the market demand is for the product.

For example, I have had Migraine headaches since my late 30’s. For years, pain pills that mask the pain for a while were the only medication available. I’d take them for about nine months, and then they would loose their effectiveness so I’d have to get off of them for three months out of every year. During that time, all I could do was suffer.

In the early 1990s, Imitrix came out. Instead of masking the pain, it actually decreases the size of blood vessels that cause the pain, and it works in about 30 minutes.

Let me tell you, there was a market demand for that product, and because it was the first product to effectively treat Migraines, the cost for Imitrix was and continues to be high, but I gladly pay it and am grateful to the person who invented Imitrix.

If you can create a product with such high market demand and for which there is no competition, you can also charge a high price for your product.

If you are not fortunate enough to invent a new product with a high market demand, you will have competitors. How they price their similar products will influence what you can charge for your product.

Thus, the market demand and the amount of competition for your product are important considerations in your pricing strategies.

To get to the next post in this series, click on the link: The Effect Of Competition On Pricing Strategy

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This entry was posted on Monday, May 12th, 2008 at 7:51 am and is filed under Price.You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.