Pricing strategies have been the topic of my last three posts. You can access these posts below:

Pricing Strategy: Extenuating Circumstances

The Effect Of Competition On Pricing Strategy

Pricing Strategies - Quantity Discounts

This post deals with a fourth important question to consider as you develop your pricing strategies:

Can You Maintain Your Prices Over Time?

I mentioned earlier that as a product life cycle matures, price usually decreases while competing products increase. So you need to expect some price devaluation over time and build that expectation into your pricing strategies.

Economic changes influence price. A recession or economic downturn can force lower prices for many products. Sometimes the downturn occurs after products are produced so the price difference comes directly from your profit. Your pricing strategies should provide contingencies for dealing with changes that detract from your profits.

On the other hand, inflation and economic upturns can have the opposite effect. Products that you produced at a lower price can then bring you a higher price.

However, profit from that higher price is often eroded by other increased costs like marketing or sales activities and distribution. Your pricing strategies should note if you will take full advantage of the profit potential brought on by inflation or if you will hold your prices constant for as long as possible.

Price consistency or elasticity is an important consideration in your pricing strategies that should be decided and planned in advance.

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Posted: Pricing Strategies:
Price Consistency

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This entry was posted on Thursday, May 15th, 2008 at 7:08 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.