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Word Count: 861
Pricing is probably one of the most difficult aspects of the marketing plan for a small business yet the most crucial if a profit is to be made Setting prices is an art not a science Its the art of striking a balance between what you need to stay in business and the markets perception of what your product is worth Determining what to charge for your product is one of the toughest trickiest and earliest decisions youll experience Youll be out of business if you dont charge enough or you over price your product Effectively pricing a product or service can be a challenge The job can be made a little easier if run a process consisting of four separate yet on-going phases The phases are 1 Establish a pricing strategy for the new product or services 2 Create a pricing policy for the new product or services 3 Assign specific price levels 4 Review and maintain pricing for existing products or services Each of these phases will likely be restarted and reassessed several times during the effective life cycle of the product or service This reassessment may be triggered by any number of internalexternal factors including entering a new phase of the product life cycle changes in the competitive or regulatory environment changing market dynamics and short term promotional initiatives Pricing Strategy The pricing strategy is simply a statement of what are trying to accomplish with a given product or service at a given point in time It must be consistent with overall corporate goals and objectives Depending on the scope of company product line and the markets served the pricing strategy may or may not be the same for all product lines and will likely require change over time Most pricing strategies will flow from one of two overriding objectives that a company will establish for a particular product or service They are 1 Maximize revenue and profit or 2 Maximize market
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