#Business Price it right-get it right


Do you dress to impress?
My Mother always told me that clothes maketh the man.
Now I always thought that she was not impressed by my dress sense, but I can now see what she was getting at.
Customers can get the wrong message about your business by how you market yourself. In fact it could kill the sale before they get through the door. Why?
Many businesses start out too low priced in the mistaken belief they have to do this to gain a competitive advantage. But is this right?
To make money and thereby profits, your products and services need to meet your cash flow requirements, and cover overheads and margin requirements. Whatever you planned it will not run smoothly, and you must have researched the product and prices required.
Under pricing makes the task harder from day 1. We are supposed to maximise, not minimise profits!
Cheap is always cheap, sounds obvious eh? If Primark trebled it’s prices would you still shop their? I think not! People shop their for value priced products, not designer labels. The minute you change the relationship with the customers perceptions you are lost. Marks & Spencer’s tried this route and people quickly lost faith, and it took years to rebuild quality image. No-one expects their food to be cheap!
People associate low price with low quality(sales excluded) even though it may be superb quality, it just is how it goes!
Once this is your customers perception, they will be reluctant to accept price hikes.
At Coca Cola we always believed a competitor selling a cheap product could be undercut by another cheap product, and another until 1 by 1 they died a slow painful death. And they did. Remember Virgin Cola? The Pammy bottle? They were going to destroy Coke, hype hype hype, NSU backing etc. did they?
Remember people with lower overheads than your can always undercut you, but they cannot necessarily match your quality or service or other USP’s
Cost plus is the common misconception. Many Businesses simply apply industry margins such as 50% in the case of clothing. But what if the volume does not cover your overheads?
Better to understand the market, your brands and your customers before you start, before you purchase/rent your shop etc.
If you do not command a premium, think about overheads. Do you need the size of shop you first thought of? Can you get that rent lowered, rent free period?
Price comes after research, not before!
You need to understand your demographics, competitors, what customers needs are, and what benefits you can offer to match these needs. It might be as simple as opening hours? Range, size, colours, methods of payment accepted, on line, 24/7.
Having done this, have belief in yourself. Better to take your time, hold your nerve, market yourself properly, rather than a knee jerk approach.
Every day, look at what your competitors are doing? Price, range, image.
People only have one source of money, you have to fight for it, before they spend it on something else, whatever that may be. People must want to shop with you. Your business on line or the high street, needs to say come in, you will like what you see.
A welcoming approach visually and verbally is paramount. Want the customer, put them first. Be in their shoes, would you like what you see?
I hope this helps?

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